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Friday, April 25, 2014

E-gaming on Saipan now law
Government issues 3 RFPs for video lottery

Gov. Eloy S. Inos signed into law on Friday a bill allowing the operation of electronic gaming machines in hotels on Saipan, ending months of discussions and compromises between the House, the Senate and the administration. Others describe it as legalization of “stealth casino gambling” on Saipan.

The newly-signed Public Law 18-30 amends the definition of gambling device “to exclude electronic gaming.”

The governor said he approved the measure to assist the CNMI in meeting its obligations to the Settlement Fund and the NMI Retirement Fund.

But the governor said he is concerned about the reduction of fees to $2,500 per poker machine for those situated in hotels involved in electronic gaming.

Currently, the license fee per poker machine on Saipan is $12,500 and the governor was concerned that the new electronic gaming measure would reduce the fees for poker machines.

“That said, I have been assured by the Ways and Means Committee of the House of Representatives that an amended measure will be forthcoming to remove poker machines from the list of reduced fees for those situated in hotels for the purpose of electronic gaming,” Inos said in his letter, transmitted yesterday to the Legislature.

The new law allows electronic gaming machines only in hotels with at least 100 rooms or, if they have fewer than 100 rooms, should be attached to a golf course.

Rep. Tony Sablan (Ind-Saipan), author of the bill that became P.L. 18-30 and Ways and Means Committee chairman, said yesterday that the signing of another major revenue-generating bill will help the government meet its obligations.

“I am glad that the governor had the opportunity to review the bill and sign off on it. We’ve been waiting for this for a long time, so that we can deal with our financial obligations. I hope that in this holiday season, we start realizing some profits from this through excise taxes by bringing in the machines. The 25-percent deferment of pension is also hurting a lot of people,” Sablan told Saipan Tribune.

Sablan said he is poised to introduce a bill amending the electronic gaming law “to remove misinterpretation” of the fee.

He reiterated that the $2,500 fee per machine is for those that are inside hotels.

Sablan said that based on information he gathered, a machine costs some $20,000, with different game versions and not only poker.

Under the new law, electronic table games include poker, roulette, baccarat, craps, big wheel, slot machines, baccarat, pai gow, sic bo and any variations or composites.

They must comply with the latest international technical standards set by Global Gaming Laboratories International LLC or SIQ Gaming Laboratories.

Sablan introduced House Bill 18-51 or the Tourism Entertainment and Destination Enhancement Act of 2013 in April. After four House floor amendments, a Senate substitute and a conference committee report, it finally reached the governor’s desk two weeks ago.

Senate President Ralph Torres (R-Saipan) said the $2,500 per electronic gaming machine license fee is “too low” but in the spirit of moving the bill forward, he also voted “yes” to it.

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.

The governor, at the same time, urged the Legislature to “scrutinize proposed fees more carefully in future legislation so the Commonwealth may maximize benefits to fund much needed programs.”

Bridge Capital LLC is one of the companies interested in investing in electronic gaming. Its lawyers had been attending House and Senate sessions whenever the bill was scheduled for discussion or action.

Casino gambling is legal only on Tinian and Rota. Saipan voters rejected the proposal twice, and a House casino bill was rejected thrice by the Senate in one form or another.

Video lottery RFP

In other news, the Inos administration issued yesterday three separate requests for proposals related to video lottery.

The CNMI is seeking a qualified supplier to provide up to 1,000 video lottery terminals that comply with identified specifications and associated gaming software and services to establish and maintain video lottery gaming operations on Saipan for a 20-year period.

The first RFP is for “supply of video lottery terminals and associated services,” while the second RFP is for “video lottery gaming site and associated services.”

The third RFP is for “supply of video lottery central control system and associated services.”

This comes some two months after the governor signed into law the video lottery bill that Rep. Antonio Agulto (Ind-Saipan) introduced.

Under Public Law 18-20, video lottery terminals are strictly limited to golf resorts, hotels that have at least 100 rooms, or at any airport departure area that is accessible to departing passengers only.

Inos earlier asked lawmakers to consider video lottery legislation that could be used for debt service for a multimillion pension obligation bond. That was the same day the governor signed the authorization bill for the POB.

Video lottery is run by the government with significant controls on all aspects of gaming activity to accomplish specific government objectives such as economic development, integrity in gaming and tourism development, the administration said.

Besides the video lottery law and the electronic gaming law, the governor also recently signed a tax amnesty measure that will be in effect up to Jan. 2, 2014, seen to also generate additional revenue for the government.

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