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Thursday, April 24, 2014

New Saipan casino bill—again
Senate faces challenges in reconsidering ‘filed’ casino bill

With the Senate facing legal challenges in trying to reconsider a Saipan casino bill that it shelved three months ago, House floor leader Ralph Demapan (Cov-Saipan) prefiled late afternoon yesterday an entirely new measure legalizing casino operations on the island. This is the fourth legislation of its kind to be introduced in four years, each of them rejected by the Senate in one form or another.

“Things have changed over the past months,” Demapan told Saipan Tribune, hours before prefiling his Saipan casino bill along with a handful of co-sponsors.

He said that within the last few months, the government has been mandated to pay annually into a retirement settlement fund, pensions have been cut by 25 percent, and government health insurance premiums have increased, on top of other public health services.

“I still believe that casino will generate needed revenues to make payments to the settlement fund, restore 25 percent pension cut, generate jobs for the people. It would be a different bill because of the changes that happened recently,” Demapan added.

Senate President Ralph Torres (R-Saipan) separately acknowledged yesterday that the Senate faces legal and technical challenges if it pursues its plan to reconsider the Saipan casino bill three months after it was “filed”—the legislative term for “shelved.”

“We understand that there are questions about us reconsidering it a few months after it was filed, when we could have done it only a few days after it was filed or the very next session. I think it would be safer and easier if a new bill would be introduced in the House,” Torres told Saipan Tribune.

During Tuesday’s Senate session, senators were supposed to tackle the shelved casino bill. When they emerged from a closed-door meeting during a session break, the Senate leadership announced they won’t be acting on the casino bill that day.

The Senate president, who was previously lukewarm to Saipan casino bills, said were it not for the required government payment into the retirement settlement fund—$27 million in fiscal year 2015, $30 million in fiscal year 2016 and so on—along with the need to restore the 25-percent pension cut, he wouldn’t have thought about reconsidering a casino bill.

The Senate has nine members—three each from Saipan, Rota, and Tinian. Casino gaming is legal only on Rota and Tinian, whose leaders have been protective of their gaming industry. They claim their casinos would be harmed if casinos are also allowed on Saipan.

Demapan, meanwhile, said the new gaming bill is expected to pass the House once again. In June last year, a Saipan casino bill passed the House by a vote of 13-7 after more than six hours of debate that latest until almost 8pm.

The floor leader said other changes in the past few months that led him to introduce a new bill included the signing of laws legalizing video lottery and electronic gaming.

“Because we already have electronic gaming and video lottery laws, I changed the bill to only allow a single casino license on Saipan rather than multiple licenses as the earlier bill offered. But I want this single license holder to build a casino from the ground up to the roof to maximize revenues and jobs for the CNMI,” Demapan said.

The proposed Saipan casino license requires $30 million payment upfront, and $15 million every year thereafter until the duration of the license.

Each license is for 25 years, with the option to extend for another 15 years or a total of 40 years. This means the license alone could cost some $600 million in a 40-year period, and this still excludes the business gross revenue, other taxes and fees, plus the multiplier effect in the economy.

The casino application fee alone is $1 million.

Legalizing casino operations on Saipan has been a divisive issue.

Its opponents have been citing casino gaming’s social ills, among other things, and have been pushing for other revenue-generating ideas. They said Saipan already has poker machines and soon, video lottery terminals and electronic gaming.

Casino initiatives were rejected twice before by Saipan voters.

Lawmakers supporting casino gaming on Saipan said this is the only industry that could immediately pump millions into the government coffers just on application fee and license alone. They added that there has never been alternatives proposed that could generate millions in a short period of time to help retirees and provide more funds for public health, public safety, and education.

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