One casino application rejected

The Lottery Commission rejected yesterday afternoon the application of Marianas Stars Entertainment Inc. to develop a casino resort on Saipan, saying it did not deposit $30 million in escrow “on time” on May 5 as required by law. Marianas Stars’ Cario Hon told Saipan Tribune last night, however, that they “wired the money before deadline.”

Lottery Commission chair Sixto Igisomar said Best Sunshine International Ltd.’s application will be further considered and reviewed with the help of two consultants that the commission hired also yesterday.

Best Sunshine will have a presentation before the Lottery Commission at 1:30pm on Tuesday, but this meeting is closed to the general public.

Prior to that, the commission will meet with the two consultants at 10am on Monday. They are casino investigator B2G Global Strategies out of California, and gaming development consultant The Innovation Group out of Florida. The contracts are expected to be finalized before that presentation.

Both consultants have dealt with entities based in and outside of the United States, including those in Macau and Hong Kong. Best Sunshine and Marianas Stars are part of entities based in Hong Kong, among other things.

Igisomar, meanwhile, said the earlier “assumption” from the administration may have been that the submission of the two business plans on time on May 5 meant that each of the two applicants also deposited $30 million in an independent escrow on time.

“…but after further review from the commission, there was no money; the money was not actually there,” Igisomar told reporters on Capital Hill.

When pressed whether the $30 million came in at a later time, Igisomar said, “Right now, there’s one applicant we’re reviewing, and that’s the applicant that satisfied the business plan and $30 million [deposit].” But he said Marianas Stars submitted their business plan on time.

Marianas Stars’ Hon, however, said the Lottery Commission’s “conclusion” is “incorrect.”

“We wired the money before deadline,” Hon said in a phone interview.

He added that Marianas Stars was “shocked” to learn from the media yesterday afternoon about the commission’s rejection of their application.

Marianas Stars Entertainment Inc. is partly owned by Mega Stars Overseas, the new owner of Tinian Dynasty Hotel & Casino. Hon is chief executive officer of Mega Stars.

The $30-million deposit, if a license is approved, will be the source of funding to restore CNMI retirees’ deferred 25 percent pension, among other things.

Best Sunshine is a subsidiary of First Natural Foods Holdings, while Marianas Stars is under Chinese Strategic Holdings.

Consultants hired

Igisomar said the commission also sought guidance and references from the Federal Bureau of Investigation in seeking out consultants needed.

“We wanted background in Federal Bureau of Investigation and relationship with the Federal Bureau of Investigation in casino development. We’re looking for parties with broad casino resort development experience, that’s why we specifically sought out [these firms and got their proposals]. It wasn’t a broad open application process,” said counsel Jim Stump.

The commission approved negotiating a consultant contract for casino investigator B2G Global Strategies, a California-based international consulting firm specializing in private investigations, background screening and security consulting, policy guidance and strategic solutions for the business sector in the U.S., Latin America, Europe, and Asia.

In its business prospectus, B2G Global Strategies says its principals have over 200 years of collective experience, extensive international investigations experience, and wide-ranging experience in federal law enforcement, regulatory compliance, and corporate security.

Among B2G Global Strategies’ principals are former Nevada Gaming Commission member and practicing attorney Frank Schreck; former U.S. Drug Enforcement Administration administrator and former U.S. attorney Asa Hutchinson; and former FBI special agent and former FBI Congressional Affairs Office liaison officer Tim McNally.

Completing the list of B2G’s principals are Arturo Alemany, a consultant for Fortune 500 companies including technology companies that specialize in South American gaming industry; former FBI special agent in charge Steven Gomez, who headed the FBI’s Counter-terrorism Division in the Los Angeles, California field office; and Lisa Garcia, founder of an international investigations-fraud and risk mitigation consulting business H. Garcia & Associates and also formerly with the FBI and DEA.

Two to three of B2G’s principals are expected to be on Saipan in the next few days, including McNally and Garcia.

The four-member Lottery Commission also approved a gaming consultant contract negotiation with The Innovation Group, a Florida-based provider of consulting and management services for gaming, hospitality, leisure, and entertainment industries.

Steve Rittvo, chief executive officer of The Innovation Group, told the governor in an April 30 letter that they have assembled a team of experienced staff spanning construction and development, operations, and marketing experience in gaming resorts, and leisure industry investment banking to meet the project needs.

“We believe with this team and our experience in Asia in working on private and governmental sides of integrated resort development, positions us uniquely to assist the Commonwealth,” he said.

No guarantee

The Lottery Commission started its meeting at 1:43pm with the four commissioners present—chairman Igisomar, who is the Department of Commerce secretary; Finance Secretary Larrisa Larson; Department of Public Safety Commissioner James Deleon Guerrero; and Deputy Attorney General Gil Birnbrich.

Also present were assistant attorney general Reena Patel and counsel Jim Stump.

DPS’ Deleon Guerrero made a motion to reject Marianas Stars’ application for failing to comply with Section 106 of Public Law 18-38, as amended, or the casino law. Birnbrich seconded the motion. All four approved the rejection.

Lottery Commission chairman Sixto Igisomar, second from left, addresses fellow commissioners during a meeting on Capital Hill yesterday afternoon wherein the panel rejected one of the two applications for an exclusive Saipan casino license and approved the hiring of two consultants. From left, Public Safety Commissioner James Deleon Guerrero, Igisomar, Finance Secretary Larrisa Larson, and Deputy Attorney General Gil Birnbrich. (Haidee V. Eugenio)

Igisomar said although there’s only one applicant now—Best Sunshine—that is not a guarantee that it will be granted the exclusive Saipan casino license because its application and business plan still have to be scrutinized by the commission with the help of the consultants.

Public comment

Only at least three members of the general public showed up, besides the media, at the commission meeting.

Russell Schow, executive director of the Marianas Research and Development Foundation, was the only one that made a public comment, reminding the commission to be careful in reviewing and selecting applicants because of their possible ties to triads.

Schow also said the commission should take into consideration whether Saipan has the road, airport, hospital, and law enforcement infrastructure and resources to deal with a huge casino investment.