Government agency requests involvement due to gambling corporation's failure to deliver on casino project and subsequent massive financial obligations.
The Commonwealth Casino Commission (CCC) in the Commonwealth of Northern Mariana Islands (CNMI) struggles to stay afloat. Imperial Pacific International (IPI) currently owes the regulator a whopping $55 million, as reported by the Saipan Tribune. There's no indication that they'll manage to pay this debt off.
In a recent gathering, the CCC disclosed that IPI's bill has grown further after missing another deadline. As of now, IPI owes over $46 million for its license and $9.4 million for regulatory fees, according to the commission. The CCC is even finding it tough to pay its own office rental costs. Their normal offices were shut in January, and they've been operating from a conference room at a local commercial facility since.
In exchange for gaming monopoly in Saipan, IPI had agreed to provide a cut of their earnings to the government. They were supposed to pay $15.5 million for their license and $3.1 million for regulatory duties, but they've failed to do so since 2020.
This has left the CCC in a tricky position, as the expected income was intended to fund the commission. Some of these funds were also meant to support government-led programs, including a pension plan for civil servants.
In Need of a Lifeline
The CCC has made numerous pleas to the government for a financial rescue or loan. They approached former governor Ralph Torres during his tenure, as well as the new governor, Arnold Palacios, after he took office in January. Unfortunately, neither official responded to their requests.
CCC board chair Edward C. DeLeon Guerrero has urged the government to lend the regulator money, promising to repay it once they receive payments from IPI.
Protracted Arbitration
The predicament with IPI has become so severe that a judge authorized a series of auctions of Imperial Palace assets to help pay off the company's debt. So far, these sales have raised more than $1 million, with a fourth auction scheduled.
Yet, this has had minimal impact on their debt burden. apart from what they owe the CCC and CNMI, IPI also has significant debts with contractors and employees.
The CCC is currently embroiled in arbitration with IPI. A judge recently ordered the two parties to sit for negotiations, contending that IPI had the right to present their case despite their repeated defaults.
The regulator continues to hold regular meetings, despite their financial struggles. Their situation seems likely to worsen before anything is resolved, as the two sides won't meet until the end of May.
There's no assurance that the CCC can even attend that meeting. The arbitration hearings will take place in Hawaii. But if the regulator is strapped for cash now, they might not have the funds to cover travel expenses then.
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