Imperial Pacific Tries to Force Regulators’ Hand over Imperial Palace

Article by : Helen Oct 19, 2020

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Three months ago, the Commonwealth Casino Commission (CCC) threatened to revoke Imperial Pacific International’s (IPI) license for the Saipan leg of its Casino resort due to the company owing millions of dollars in debt. Following the public notice, the IPI, in August said it would not be possible to cough up the $15.5 million as a lump sum. However, they proposed to pay the outstanding debt in two-part installments if the CCC would agree.

If CCC agrees to the IPI’s proposal, the company would pay next year’s license fee in two installments, with 2022 returning to the initial, single-payment agreement.

Since the CCC did not respond to the IPI’s counteroffer or make any move to yank their license, the latter is back, seemingly trying to call the shots. The casino operator amended its Casino License Agreement (CLA) (PDF), asking to continue operations in Saipan. This calculated move can only be described as unprecedented, considering the IPI cannot tell the CCC what to do.

Experts believe that since the CCC has failed time after time to follow through with its threats or hold IPI accountable, the IPI might, once again, get away with its deviancy.
Per the new terms put forth by the IPI, the casino giant wants to pay half of its $3 million annual fees. It also wants the non-negotiable $20 million it contributes to the community fund paused for the remainder of the year.

But the cherry on top was the IPI seeking permission from its creditor, the CCC, to take legal action against gamblers who owe the casino. According to its debt-collection strategy, the casino will go as far back as 2015 to wrangle money out of debtors and pay 15% of monies collected as tax revenue.

Additionally, it seems that the IPI wants to maintain its dominance of the Saipan’s casino market, something that should not be ignored by the CCC.

These are just a few of the demands the IPI made in its “Points for the 9th amendment of the CLA” letter addressed to the Commonwealth of Northern Mariana Islands (CNMI), earlier this week. For the first half of the year, the company reported a massive loss of $103.2 million and alleged that it incurred $1.17 billion as gross accounts receivable from VIP gambling activities. The casino allowing gamblers to incur debt such says a lot about its ethical and management issues.

But that is not all—it is also demanding the implementation of iGaming and amendment to license fees regulations; so if an unfortunate event, such as Coronavirus, forces it to close down for 30 days or more, there would be a hold on the payment.

Even if the CNMI rejects the amendment, it is unclear what the future holds. However, if nothing is done, the IPI will remain unhinged, continuing its unethical behaviors. There is no doubt that without proper regulation, the casino will also continue to take advantage of the leniency of the CCC and withhold payment from its employees and creditors.

In 2019, the company was ordered to pay $3.36 million in settlement by the U.S. Department of Labor following investigations that revealed several labor law violations at the Saipan casino.

The violations were committed by IPI’s building contractors and relate to the company’s failure to compensate workers properly, as well as not maintaining satisfactory records for a two-year period, January 2016 to December 2017. IPI’s continuous habit of skirting laws and regulations has led to a few other investigations and lawsuits, and as of now, its debt is mounting.