“There is a greater chance of success for Imperial Pacific International (CNMI) LLC to sell its assets and the casino license if they voluntarily surrender the ‘exclusivity.’”This was the recommendation made by Commonwealth Casino Commission chair Edward DeLeon Guerrero in a letter to Gov. Arnold I. Palacios, the Office of the Attorney General, and the CNMI Legislature.During a CCC board meeting yesterday, DeLeon Guerrero and members of the commission expressed that the casino industry is still very much alive, but changes need to be made to see it flourish.Newly sworn in commissioner Thomas Atalig Manglona, echoing DeLeon Guerrero’s sentiment, expressed that he took on the position as a CCC commissioner because he believes the casino industry has a fighting chance to possibly be the CNMI’s second economic driver next to tourism but only if something is done to help the industry.“I take this duty very seriously. In the CNMI, people are suffering to make the choice between buying food or paying their bills. We are obligated to find a way to do something about it. We only have one industry right now; there’s a military build-up but that’s going to take some time. I’m willing and looking forward to working with the commission on this,” he said.DeLeon Guerrero shared that he has written a letter detailing recommendations that would help the casino industry succeed in the long run.“There is a greater chance of success for IPI to sell its assets and the casino license if they voluntarily surrender the exclusivity, the Casino License Agreement gets amended, and the Legislature entertains amendment to P.L 18-56,” he said.“It is my understanding that the District Court in the Oct. 1, 2024 IPI’s bankruptcy hearing, decided to allow the sale of IPI’s assets along with the casino license to increase its value. While the CCC is not necessarily against this idea, it is important to remember that IPI has not satisfied the requirements of the CNMI casino gaming statute (P.L. 18-56), specifically the requirements for IPl to invest a minimum of $2 billion and construct a minimum of 2,000 new hotel rooms of 5-star quality. If the casino license is to be included in the sale of IPI’s assets, then the potential buyers need to be informed that they would be required to satisfy these requirements as well. To date, IPI has invested an estimated $400 million in the construction of the Initial Gaming Facility (Imperial Pacific Resort or Imperial Palace) in Garapan with 329 rooms under construction and 15 completed 5-star villas,” he adds.DeLeon Guerrero recommends that the Commonwealth, with the assistance of the OAG, Office of the Governor and the Legislature, consider requesting the federal bankruptcy court to allow IPI to voluntarily surrender the casino license exclusivity.The CCC chair adds that the CCC should cease all license revocation deliberations and related proceedings.In addition, DeLeon Guerrero recommends that Palacios request the Commonwealth Legislature to amend P.L. 18-56 once IPI voluntarily surrenders exclusivity to allow more casino licenses. “The CNMI should grandfather one license for IPI (for the subsequent buyer).”Also, DeLeon Guerrero suggests that the minimum investment amount be lowered from $2 billion to $300 million per licensee to build new hotel rooms or invest $50 million per licensee to renovate existing properties. Also, to reduce the number of required hotel rooms from 2,000 new hotel rooms to 300 rooms per licensee.Furthermore, the CCC chair suggests lowering the annual casino license fees from $15 million to $5 million per licensee; lowering the annual regulatory fees from $53 million to $1 million per licensee; impose a casino gaming tax of 5% of gross gaming revenue; and imposing a one-time one-year fee ($15.5 million license fee and $3 million regulatory fee) as part of the post-petition fee requirements under the current law in approving the transfer of a license to a new investor.CCC also suggests a requirement of a $1-million application fee to cover costs associated with the investigations and other due diligence to include financial, criminal, probity and other related vetting of the new casino licensee.Lastly, CCC requests that the existing Casino License Agreement between the Lottery Commission and IPI be amended to; delete and waive IPI’s future obligations to construct Phase I and Phase Il of the CLA. delete other IPI’s obligations not related to the Initial Gaming Facility, and delete the Community Benefit Fund provisions moving forward“IPI’s obligations should be restricted to completion and satisfaction of the requirements of the Initial Gaming Facility (Imperial Pacific Resort or Imperial Palace),” he said.“The House of Representatives, in the recent budget hearing, expressed their willingness to entertain additional licenses but noted its concerns to amend the gaming laws because IPI still has the exclusive license. In the past, however, IPI has publicly agreed to waive the exclusivity if they can retain one license. As noted, these are my recommendations on how to move forward with our casino industry. If we do not consider these options, this matter will drag on for many years and the Commonwealth will not realize the economic potential and other benefits that the gaming industry can contribute to our economy,” DeLeon Guerrero adds.
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