Saipan closer to casino gaming

After years of rejecting at least four casino measures from the House of Representatives, the Senate passed last night by a 5-4 vote a bill allowing casino gaming on Saipan. The bill is now on its way to Gov. Eloy S. Inos, who has supported casino legislation and other new sources of revenue amid 25-percent pension cuts, annual payments into a retirement settlement trust fund and spikes in health insurance premiums, among other things.

The Senate’s surprising nod—which was unthinkable in past years—came only a day after the House passed it.

Senators passed the casino bill on first and final reading at 6:08pm without amendment and despite some senators’ plea to hold off action on it until members have fully reviewed the legislation.

Discussion on the bill took only a little over an hour starting at 4:51pm and inclusive of four-minute break before voting.

Those who voted against House Bill 18-179, House Draft 4 said the bill is “tailored” for a specific investor who will become an exclusive Saipan casino license holder for 40 years and who is supposed to cough up at least $31 million within 15 days of the bill’s enactment into law.

The four who voted “no” were Sen. Frank Cruz (R-Tinian), Sen. Jovita Taimanao (Ind-Rota), Senate floor leader Ray Yumul (Ind-Saipan), and Sen. Paul Manglona (Ind-Rota).

The five who voted “yes” were Sen. Frank Borja (Ind-Tinian), Sen. Joaquin Borja (Ind-Tinian), Senate vice president Victor Hocog (R-Rota), Sen. Pete Reyes (Ind-Saipan), and Senate President Ralph Torres (R-Saipan).

Before casting his vote, Sen. Frank Borja said, “for the economy and the CNMI and for retirees, yes.” Sen. Joaquin Borja echoed the sentiment.

Taimanao, for her part, said there are other ways to generate revenue before voting.

Torres, during the session, said he has not supported casino gaming on Saipan since 2007 because it’s been rejected twice by Saipan voters, among other things.

“However, times have changed,” Torres told his colleagues, enumerating the government’s challenges including the decision to defer retirees’ 25-percent pension and annual payment into the retirement settlement trust fund as a result of the Betty Johnson lawsuit.

Torres, who became Inos’ 2014 gubernatorial running mate in September last year, said were it not for the settlement deal, the pension system would have been bankrupt by March 14 this year.

“That’s not an opinion; that’s a fact,” he added.

Reyes, during debate on the bill, said he would rather try and see whether an investor comes forward and pumps in millions into the government coffers and local economy within 15 days of the bill’s signing rather than not take any chance at all.

The bill requires a minimum investment of $2 billion in the CNMI, inclusive of the casino itself and building a new hotel with at least 2,000 rooms.

Senators asked the legal counsel, Joe Bermudes, whether passing the bill would affect the existing Rota and Tinian gaming laws. Bermudes said “no.”

Taimanao said action on the bill seemed “rushed,” because senators just received the over 30-page bill yesterday morning. She asked that senators be given more time to fully review the bill.

Assuming the bill is passed, Manglona said that within 15 days of its signing into law, a nonrefundable $1 million application fee has to be paid and $30 million in two-year advance annual fee, which he described as “very clear cut requirements.” He said this also led him to believe the bill is tailored for a specific investor, which he said had been done before such as for golf and hotel investors.

But Manglona said if any investor is serious in investing in a casino, that investor should come forward now rather than later when the bill is already passed and signed, only to be amended later.

He also pointed to a provision that gives millions to Rota and Tinian but only after retirees’ needs are satisfied.

“Let’s not mislead each other that this $2 million will go to Rota [and $2 million to Tinian],” he said, adding that he’d rather see all the money goes to retirees.

Hocog also posed the question whether Saipan casino won’t be allowed anymore if after 15 days of the bill’s signing, no investor comes forward and pay the required amount.

House floor leader Ralph Demapan (Cov-Saipan), main author of the casino bill, said last night he’s “very grateful and appreciative of the Senate’s expeditious action” on the casino bill.

“This is not a perfect legislation but I respectfully ask the governor to seriously consider it so we can begin the process of [appointing] commissioners and selecting applicants,” Demapan told Saipan Tribune.

Demapan said he does not know of any particular investor that will apply for the exclusive Saipan casino license.

In the Senate session yesterday, representatives from Bridge Capital were present. Former Senate president Juan Demapan testified on the casino bill yesterday and raised concerns about its language. He likened this particular bill to the botched $190.8-million no-bid power purchase agreement between the former governor and Saipan Development LLC.

Press secretary Angel Demapan, when asked last night whether the bill is as good as signed, said the governor has not had a chance to review it, “especially the amendments that were approved in the legislative process.”

The Senate vote came just four months after “shelving” the last House casino bill, and months after other gaming laws were enacted including video lottery and electronic gaming.

In the House session on Monday, Rep. Ralph Yumul (Ind-Saipan), one of those who strongly opposed the casino bill, said it is “reckless” for the House to vote on the bill—on the day it was introduced and placed on calendar for action—without conducting any public hearing on it or without being referred to a committee.

But the bill’s author said what’s reckless is “if we continue to [let] our people to suffer,” referring to the 25-percent pension cut, among other things.

Legalizing casino operations on Saipan has been a divisive issue in the CNMI for several years now. Casino gambling is legal only on Tinian and Rota but as of today, only Tinian Dynasty Hotel and Casino is operating in the CNMI.