CNMI Regulators Caved In to Imperial Pacific International’s Demands to Extend the Deadline for Repaying Its Debts
The Commonwealth of Northern Mariana Islands (CNMI) Casino Commission’s battle with Imperial Pacific International (IPI) has been a fierce one. Now, it seems the casino operator has gained the upper hand in the struggle – at least for now.
The gist of the ongoing conflict is this: IPI owes money to the Commonwealth of Northern Mariana Islands but has asked the CNMI Casino Commission to give it more time to repay the debt. The Commission initially refused and demanded the debt be paid. In a surprising twist, the Commission has now agreed to give the casino operator five more years to pay up the existing debt – and three years for the annual fee due March 1.
According to the casino license agreement, Imperial Pacific International, the casino operator behind the development of Imperial Palace in Saipan, took up the obligation to pay $20 million to the CNMI community benefit fund (CBF) every year. However, it didn’t fulfill the obligation and failed to contribute $36 million to the fund over the previous years, all the way back to 2018.
The ongoing standoff between the Casino Commission and Imperial Pacific International strongly resembled a tug of war. The Commission threatened to revoke the casino operator’s license several times, while IPI kept requesting the extension of the deadlines while acknowledging it has no disposable income to pay up.
The Commission provided more time for IPI to cover its debt multiple times: first until July 10, then August 31 of this year, then until February 28, 2021 – and that’s only this year. This wasn’t enough for the casino operator, however – they failed to meet the extended deadlines time after time.
In the most recent development, the CNMI Casino Commission caved into IPI’s request and agreed to give the casino operator five years to pay the $36 million to the fund. As for the annual licensing fee due next March, the regulator extended the deadline for contributing it as well – up to three years, or until the end of the company’s Garapan facility construction, whichever comes first.
Apparently, the CNMI Casino Commission acknowledges Imperial Pacific International has nothing to pay with and hopes the casino operator will use the time given to finish developing its casino resort in Garapan – and start turning a profit. Whether this will work, though, remains to be seen.
This is hardly the first time Imperial Pacific International is in the middle of negative publicity. The casino operator has recently been the center of attention due to its inability to cover its monthly payroll, which is another sign that Imperial Pacific International is in deep financial trouble. The company has also reported losing $503 million in 2019 and $380 million in 2018 – long before the coronavirus pandemic undercut most casino operators’ income flows.
Furthermore, Imperial Pacific’s flagship project in the Commonwealth, the Saipan casino resort, was supposed to be opened way back in 2017. Yet, the venue development deadline has been postponed more than once, with the latest expected opening date moved to August 2022. In the meantime, IPI operates a “temporary” casino where the resort is to be constructed – but it was also hit by the coronavirus-induced shutdowns and travel restrictions.