House battles over $10M ‘upfront’ money for casino investors

Members of the House leadership battled over the issue of whether or not casino investors should be required to have at least $10 million in “upfront money,” a day after a delegation panel pre-filed a report on a local bill legalizing casino gambling on Saipan.

Rep. Froilan Tenorio (Cov-Saipan), during a closed-door leadership meeting yesterday, said casino investors should be made to pay at least $10 million upfront so that lawmakers will be able to restore the 80 hours biweekly for government employees.

“Without upfront money from investors and with expected revenues to be much lower than the governor’s $102 million budget, we will start laying off people by Oct. 1,” Tenorio told Saipan Tribune.

A committee version of the casino bill does not include a requirement for casino investors to have any upfront payment, other than to pay for a non-refundable casino license application fee of $200,000—down from the original proposal of $250,000.

Any approved casino license is valid for 30 years unless revoked.

Other members—including Rep. Edmund Villagomez (Cov-Saipan) and Rep. Ray Palacios (Cov-Saipan)—agreed with Tenorio’s proposal to require upfront cash from casino investors.

“If there’s no upfront money, we won’t be able to really generate money and bring back 80 hours work. I agree with Congressman Froilan,” Palacios said.

Tenorio originally wanted $25 million in upfront money, but he agreed to lower it to $10 million after discussions on the bill yesterday.

Villagomez, for his part, said a promise of restoring 80 hours biweekly is one of the major reasons why most lawmakers are supporting the Saipan casino bill.

“If you put your word out there, that you will restore 80 hours, then you should take steps to deliver [on] your promise,” he said.

The upfront money could be deposited in a Saipan account, and could be used to cover the casino investor’s future tax payments, among other things.

But Rep. Stanley Torres (Ind-Saipan), author of House Local Bill 17-44, which seeks to legalize casino gambling on Saipan, said if Tenorio or anybody wants to push for additional changes to the bill that the committee has already pre-filed, they are welcome to offer floor amendments.

Tenorio said that Torres will make the floor amendment, but Torres said it should be Tenorio.

“If he wants it, then he should be the one to do it,” Torres said.

Rep. Joseph Palacios (R-Saipan), chairman of the delegation’s Judiciary and Governmental Operations Committee that prefiled the report endorsing passage of a revised version of HLB 17-44, said the panel has already finalized its report and recommendation.

“So if there are changes that some members want to offer, they can just offer floor amendments during the next session,” he said.

The delegation’s JGO Committee concluded that Torres’s HLB 17-44 is constitutional and has the support of the community.

Torres, Tenorio, and Ray Palacios said there are enough votes to pass the Saipan casino bill. They said they only need simple majority of at least 11 among 21 delegation members—18 from the House and three from the Senate.

Under HLB 17-44, CS1, there will only be four casino licenses that will be issued on Saipan.

Of the four, one is reserved for a Northern Marianas descent corporation while the three will be for foreign investors. Each of the four will be required to pay a non-refundable $200,000 casino license application fee.

Casino investors will also be required to have at least 250 hotel rooms for their casino operation.

However, for those investors wanting to build their casino resort from the ground up, the minimum investment amount should be $100 million.

The committee version of the bill also lowers the casino gaming tax from the original 10 percent to only 7.5 percent.

All the taxes, fees, penalties, and fines will be appropriated by the Saipan and Northern Islands Legislative Delegation for medical referrals, scholarships, utility payment assistance, tourism, and the Retirement Fund.

Once the bill is signed, the governor needs to appoint five members of the Saipan-Northern Islands Casino Commission within 30 days. Each commissioner will be paid $50,000 a year, while the executive director will have an annual salary of $75,000.

The Senate has been saying that the Saipan casino bill is unconstitutional, and has threatened to take the matter to court once the Saipan delegation passes the bill.

Senators said Saipan voters should be the one to decide whether they want a casino on the island. Saipan voters had already twice rejected legalizing casino gambling on Saipan.