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Monday, April 21, 2014

Electronic gaming on its way to becoming law in CNMI
Senate OKs conference report, governor says he will sign in

The CNMI is now one step away from legalizing electronic gaming on Saipan but only at certain hotels. Senators approved yesterday an electronic gaming measure that Gov. Eloy S. Inos said he is poised to sign into law to help generate new revenue for retirees and other public programs. This comes days after the Senate essentially killed yet another Saipan casino gaming bill.

By a vote of 6-0, the Senate adopted yesterday a report by a joint committee from the House of Representatives and Senate, essentially passing the “compromise” bill and sending it to the governor for action.

Senate President Ralph Torres (R-Saipan) himself voted “yes,” despite objecting earlier to a $2,500 per machine license fee that he considers “too low.”

Besides Torres, the other senators who voted yes to the conference committee report were Sens. Victor Hocog (R-Rota), Ray Yumul (Ind-Saipan), Jovita Taimanao (Ind-Rota), Frank Borja (Ind-Tinian), and Joaquin Borja (Ind-Tinian).

Absent from the session were Sens. Pete Reyes (Ind-Saipan), Paul Manglona (Ind-Rota), and Frank Cruz (R-Tinian).

The governor, in an interview hours after the Senate action, said he’s glad that “another revenue-generating bill” is now headed his way.

The Senate passage of the electronic gaming bill also came a day after the governor signed into law a tax amnesty measure that will be in effect up to Jan. 1, 2014, seen to also generate additional revenue for the government.

“I realize that’s there’s some differing views on the [electronic gaming machine] license fee and so forth and I hope that the members can get back in and address that later on. But for now, we can at least keep that bill going and start realizing some revenue. It will give us a lot of help in trying to put together the funds necessary to aid the retirement,” Inos told Saipan Tribune in an interview at the 19th Micronesian Chief Executives Summit.

The governor said lawmakers can later revisit provisions of the electronic gaming measure.

“The bill just adds to our revenue arsenal. I’m poised to sign that particular bill but I sure like some of the issues to be revisited later on,” Inos added.

It took the Senate some time to act on the conference committee report following concerns raised by the president on the $2,500 license fee per machine. He said even poker machines on Saipan pay a license fee of $12,500 per machine.

But the bill’s author, Ways and Means Committee chair Rep. Tony Sablan (Ind-Saipan) said a joint committee from both the Senate and House spent considerable time reaching a compromise on the license fees and other issues about the bill.

While the license fee was brought down from $10,000 to $2,500, Sablan said the net gaming proceeds were increased from 10 to 15 percent. He added that the lower the license fee, the more machines that can be brought in by investors and therefore more revenue for the government.

“The bulk of the revenues would come from gaming proceeds and not the license fee,” he added.

House Bill 18-51, House Draft 4, Senate Substitute 1, Conference Committee Draft 1, is now on its way to the governor for action.

The Senate-House compromise bill makes businesses engaged in electronic gaming ineligible for a qualifying certificate, a tax break program.

The compromise version also allows electronic gaming operations only at hotels or resorts with at least 100 rooms, or those attached to a golf course if they have less than 100 rooms. These are only allowed on Saipan.

Under the bill, 60 percent of the fees collected each year will be used to restore the 25-percent cut in retirees’ pension; 15 percent to pay the interest owed to defined benefit plan members who ended their membership; 15 percent to the Saipan and Northern Islands Legislative Delegation for the senatorial district’s programs; 5 percent for Rota; and 5 percent for Tinian.

In his view, businessman Paul Zak said the Senate disapproved once again a proposal to legalize casino gaming on Saipan but nevertheless approved what he describes as a “stealth casino bill” in the form of “electronic gaming bill.”

Casino gambling is legal only on Tinian and Rota. The electronic gaming bill that is now up for the governor’s action amends the definition of gambling device “to exclude electronic gaming.”

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