More trouble than it’s worth

There are a number of troubling aspects to this bill as already pointed out by countless members of the community. Many of the problems identified by lawmakers and members of the general public can be fixed with better language; other problems may not be fixable by simply changing the language. House Bill 18-179, which authorizes a single casino license and was passed with lightning speed, also requires the immediate deposit of $15 million within 15 days of passage of the bill. In addition, the sole licensee will be required to build an entirely new 2,000-room hotel and cannot buy existing facilities. Where will this gigantic facility be constructed? Not in Marpi where two large, separate but contiguous parcels were recently leased without the necessary legislative approvals.
So, even if for argument’s sake, a 2,000-room hotel is to be built, what are the infrastructure requirements for a hotel that large and who is responsible for putting the infrastructure in place? A 2,000-room hotel will need to be hooked up to the sewer system for sure, and what about the power and water lines? So much will depend on where this mega-casino will be located. These questions remain unanswered.

As for whether a casino is the answer to our financial problems, I cannot answer that. There are numerous examples that say it is and the same number of examples that say it won’t be the answer we are all praying for. The benefits of a Nevada-style gaming industry are clear, it functions on mass and has an international reputation and credibility that generates millions for the state of Nevada. It is transparent and highly regulated. The industry proposed in this legislation doesn’t stack up to a Las Vagas-style casino and is an invitation to all the dangerous criminal elements that marred Nevada’s early gaming history. The number of our unsolved murders piles up and the drug element is already beyond out grasp. The vetting process in this bill is non-existent.

A number of people have already expressed a concern about the rebate provisions of this bill. Why is this sole licensee being granted a 100 percent rebate on gross receipts taxes? All amendments affecting qualifying certificates and laws should be held in abeyance pending public hearings and further review. Local businesses have been operating under duress for the last 10 years, paying exorbitant utilities and other fees, supporting this government without a relief from taxes. A cost-benefit analysis is surely warranted at a minimum.

And while the preamble of the bill cites Retirement Fund obligations and outmigration as its moving force, this bill doesn’t satisfy even those motivations. Most casinos are sophisticated and rely on computer operations to function, and most employees are considered skilled positions. Roulette, Blackjack, craps, poker, and the long list of 36 games itemized in the bill—all require skills. And will this new mystery casino operator ask for special language consideration, excluding most U.S citizens from jobs except the token front desk, back office, kitchen, restaurant, landscaping and janitorial employees from consideration?

Some senators asked very relevant questions during official consideration of this bill. One senator reminded colleagues that the Senate earlier rejected consideration of this casino bill because there was consensus that a casino bill was not the solution to the CNMI’s financial problem. Another senator pointed out that the language of the bill makes clear that there is “already a predetermined” casino investor waiting in the wings. This senator also pointed out that the inducement for Rota and Tinian—the so-called carrot, the $2 million promised to Rota and Tinian in exchange for their votes—is unworkable because after the 25 percent is restored to the Fund, at $17 million, there won’t be any funds left out of the $15 million annual license fee for Rota or Tinian.

Several weeks ago, the Tinian Dynasty announced a buyer for its gaming operation. We can rest assured that that prospect is gone. Not too long ago, a senator from Rota spearheaded the “borrowing” of several hundreds of thousands of dollars from the Saipan delegation to support Rota’s fledgling gaming industry and now abandons that effort entirely. This action sinks any reliability of the CNMI government as a whole. And even though this is a Saipan casino initiative, members from Rota and Tinian will serve with Saipan members for $100,000 per annum. This reciprocity does not exist in commissions on Rota and Tinian. Saipan never asked and never got membership on Rota and Tinian gaming commissions. It is not appropriate.

Proponents of this casino measure claim concern for retirees as their basis for pushing this bill and ignoring the math, the lack of transparency, and the close coordination of effort that was required to orchestrate this maneuver. This legislation is the laggard’s response to a very serious problem.

Perhaps most importantly, one lawmaker articulated a deeper concern about the CNMI’s reputation as a level and transparent place to do business, saying that the passage of this bill “will make us look bad in the eyes of other investors.”

This is not a law that should be rushed. It is more than time for the CNMI to learn from its previous mistakes because these missteps have brought us to this point. Who would have thought, for example, that the Retirement Fund would be at risk today? All those previous legislative actions brought the Fund to this point. We must protect the pension but we cannot do that if we are panicking and not thinking clearly and precisely. This legislation should be very carefully reviewed because it could end up creating more problems than we can imagine.

Juan S. Tenorio (Santiago)
Lower Dandan, Saipan