Imperial Pacific warned that paying casino license fee on time “non-negotiable”

Saipan casino operator Imperial Pacific International (IPI) has been warned to pay its annual license fee on time this year, although the company can’t even afford to refund gamblers’ deposits.

This week, IPI’s former contractor Pacific Rim Land Development asked a US federal court to allow it to claim the roughly $688k it claims is sitting in the casino cage at IPI’s Imperial Palace Resort. In April, Pacific Rim won a $5.6m judgment against IPI for unpaid construction work on the Resort.

Trouble is, IPI is dead broke and Pacific Rim is only one of many aggrieved former contractors seeking payment for work done. Commonwealth of the Northern Mariana Islands (CNMI) legislators also claim IPI is $37m behind in payments to the Community Benefit Fund, payments that IPI is required to make as a condition of its license.

On Wednesday, the Marianas Variety quoted IPI attorney Michael Dotts telling the court that the company couldn’t release the cash in the casino cage to Pacific Rim because it belongs to gambling customers, not the company.

To underscore this point, Dotts noted that one customer had requested a withdrawal of $850k in verified winnings on July 7 but the request was blocked by the Commonwealth Casino Commission (CCC) because the funds in the cage were insufficient.

IPI has a potentially much bigger financial problem on its hands in the form of its annual $15.5m license fee. The fee is due on August 12 but there’s understandable skepticism that IPI, which missed last year’s fee deadline by two weeks, will be able to meet this year’s deadline.

On Wednesday, CCC chair Edward Deleon Guerrero warned IPI’s new CEO Donald Browne – who took the reins this month – that paying the fee on time this year was “non-negotiable. This is the law.” The Saipan Tribune quoted Browne saying that IPI had “no bad intentions. We have some funding that would satisfy that.”

That remains to be seen, as IPI recently proposed a series of amendments to the CNMI Lottery Commission that included cutting its annual license fee in half. IPI also sought a reduction in its annual $20m contribution to the Benefit Fund – which IPI may or may not have paid for the past two years, nobody in government seems to know – and still more extensions on its deadlines for completing construction of its still unfinished Resort.

The proposals were so brazen that CNMI Sen. Paul Manglona asked the attorney general for clarity on whether the Lottery Commission had the authority to agree to any of these amendments. Manglona noted that the financial requests “materially change the consideration by which the CNMI granted the license” to IPI.

Finally, the CCC learned this week that acting exec director Charlie Atalig – who recently suggested IPI’s license should be suspended until the company can prove it made its Benefit Fund payments – would be stepping down as of August 7 for an opportunity with an unspecified tech firm.

Atalig told his fellow CCC members that he knew he was leaving while Saipan’s gaming industry was in turmoil and he wished he “could disembark when the ship is sailing in calmer waters.” But if he waited for that, he’d never be able to leave, so fare thee well, Charlie.