House technical correction ensures tax rebate remains

The House of Representatives made a technical correction to the Saipan casino bill it transmitted yesterday afternoon to Gov. Eloy S. Inos to clarify that the measure does not intend to scrap the tax rebate as community members feared, even as Tinian Mayor Ramon Dela Cruz warned that Tinian Dynasty Hotel & Casino “will have to shut down” the minute the governor signs the bill because of the way it is written.
Dela Cruz asked Inos to veto the bill in its current form. The Tinian mayor is concerned about Section 104 of House Bill 18-179, House Draft that imposes a $25,000 to $100,000 fine or jail term or both for any person who engages in casino gaming activity “other than the sole casino licensed under this Act.”

The bill’s title itself states that it is to authorize, establish, and regulate “an exclusive gaming license within the Commonwealth.”

“According to the advice I have sought on the bill, the minute you sign it, the Dynasty Casino will have to shut down. I ask you to please veto the bill and return it to the Legislature for further consideration,” the mayor told the governor in a one-page letter.

Tinian Dynasty Hotel & Casino is the only operating casino in the CNMI. Casino gaming is legal only on Tinian and Rota. Once HB 18-179 HD4 is signed into law, casino gaming will also become legal on Saipan.

Tinian Dynasty Hotel & Casino general manager Tom Liu earlier said that Mega Stars Overseas Ltd. will still pursue its expansion plans for Tinian Dynasty despite the casino bill’s passage.

The governor, in a brief interview after a Cabinet meeting yesterday on Capital Hill, reiterated that his office will carefully review the bill.

Earlier, Inos said he’s leaning toward signing the casino bill but would seek the Legislature’s immediate amendment to address certain issues, including ensuring the tax rebate remains and that the exclusive casino license does not violate the NMI Constitution’s land provisions, among other things. The House’s technical correction yesterday means one less issue to be worried about, officials said.

“Pursuant to the Rules of the House of Representatives, a technical correction has been made to Section 4 of the bill to clarify the intent not to adversely affect the provisions of the rebate,” the House said in its transmittal letter to the governor yesterday.

Rep. Ralph Demapan (Cov-Saipan), main author of the Saipan casino bill, separately said in an interview yesterday that it was never his intention to scrap the tax rebate program, adding that there was an oversight on the bill’s language that’s already been corrected.

“It wasn’t a deliberate intention to remove the tax rebate. It was an oversight on our part; it was overlooked. And if the governor signs it into law with recommendations to improve the bill, I will be the first one to propose amendments,” Demapan told Saipan Tribune.

Alex Sablan, president of the Saipan Chamber of Commerce, expressed relief yesterday after the House clarified that the tax rebate won’t be adversely affected by the casino bill. He said tax rebate is “one of the last real investment tools to attract investors” in the CNMI.

However, Sablan believes that majority of the members of the largest business organization in the CNMI still oppose casino gaming on Saipan.

The Chamber of Commerce will poll its membership this week on whether or not they want casino gaming on Saipan, Sablan said. He also said the Chamber’s new executive director, Jill Arenovski, started working only yesterday and will work on the poll. Arenovski replaces Patrick Deleon Guerrero, who recently resigned from the post.

‘A shame’

Besides asking the governor not to sign the casino bill, Tinian Mayor Dela Cruz also criticized senators who voted to pass the bill Tuesday night last week, especially the senators from Tinian where Dynasty is operating.

It was the first time in at least four years that the Senate approved a casino bill from the House.

“It is a shame that some of our senators, particularly senators from the Tinian Senatorial District, supported this bill without giving time for a properly legal review and a public hearing. Had they done so, they would have discovered the fundamental flaws in the bill and produced something that might have been amenable to all stakeholders,” the Tinian mayor told the governor.

Dela Cruz was referring to Sens. Frank Borja (Ind-Tinian) and Joaquin Borja (Ind-Tinian), who were among the five senators who voted “yes to the bill, along with Senate President Ralph Torres (R-Saipan), Senate vice president Victor Hocog (R-Rota), and Sen. Pete Reyes (Ind-Saipan).

The four senators who voted “no” were Sens. Ralph Yumul (Ind-Saipan), Paul Manglona (Ind-Rota), Frank Cruz (R-Tinian), and Jovita Taimanao (Ind-Rota).

The casino bill requires the exclusive casino license holder to invest a minimum of $2 billion inclusive of the casino and a new hotel with at least 2,000 rooms.

Within hours and days of the bill’s passage at the Senate, lawmakers who voted against it raised concerns about the legislation’s provisions including its chilling effect on video lottery and electronic gaming, as well as poker machines outside hotels on Saipan, Tinian, and Rota.

They also questioned whether the exclusive casino license holder for 40 years or 80 years is getting a sweetheart deal for being required to pay only a $15 million annual license fee. But pro-casino lawmakers said the $15 million is only the annual license fee and the casino license holder is still required to pay gross receipts tax, other fees and charges, along with the multiplier effects on the CNMI economy.

Under the bill, the casino investor must pay a nonrefundable $1 million application fee and partial $30 million license fee payment “within 15 days” of the bill’s signing into law. These specific provisions also led some lawmakers to believe that the bill is tailored for a specific investor, who has long prepared at least $31 million to have an exclusive casino license on Saipan. The governor said there have been a number of investors knocking on Saipan’s doors—including those from China, Korea, Macau, Hong Kong, and the U.S. mainland, and this is the opportunity for them to come forward and apply for a license.