Bartley A. Jackson, general manager of MP Holdings LLC, told the Saipan and Northern Islands Legislative Delegation Gaming Committee Wednesday that the proposed amendment to the CNMI’s e-gaming law is a well thought out bill as it will save the e-gaming industry on Saipan.
“It will bring in more revenue for Saipan,” Jackson said.
MP Holdings owns the Saipan Vegas game room.
Jackson said that both MP Holdings and Mariana Entertainment, which owns another game room, Club 88, support the passage of H.L.B. 22-28 to amend Saipan Local Law 22-6 and restructure the local license fee imposed on all electronic gaming devices located within Saipan.
Rep. Ralph N. Yumul (R-Saipan) is the author of both Saipan Local Law 22-6 and H.L. B. 22-28.
Jackson said the proposed amendment is the product of private businesses and the government putting their heads together to solve a problem.
Electronic gaming was legalized in the CNMI in 2013. MP Holdings and Mariana Entertainment are the only two companies involved in the operation of electronic gaming businesses on Saipan.
For the e-gaming industry in the CNMI, operators pay a license fee for each e-gaming machine in the amount of $2,500 per machine, or 15% of gross revenue obtained through the use of the machines, whichever is higher. Jackson said this is in addition to the regular taxes in a per facility annual license fee of $100,000.
Jackson disclosed that over the last six months or so, the operators have met with the SNILD multiple times to discuss their businesses and the effect of Saipan Local Law 22-6 on them.
He said the SNILD has also explained that the goal has been to raise funds for education and other purposes.
He said the operators are members of the community and fully support the intent of the law. Jackson said the amendment to Local Law 22-6 will enable the operators to continue their business.
He said fees will be increased and this will benefit the community. Jackson said the increase in fees, however, will be manageable for the operators.
“Without the amendment, the operators likely will close and rather than raising more funds there will be a loss of revenue that Saipan needs but will not cost the operators their business,” he said.
Jackson said the first change in the law is to strike out poker amusement machines located in the same e-gaming premises, specifically in enclosed area or resort premises. He said the effect of this is to apply the new law only to e-gaming machines as poker machines are licensed separately and the new law will be focused on e-gaming.
Jackson said this amendment avoids conflict with other laws and focuses on the Act.
He said the second change is to strike out the amount required by Commonwealth law and shall subsequently adjust to be equal to the amount addressed by Commonwealth law without further legislative action.
“What this deletion does is allow the new Act to stand alone. Without it, other laws are incorporated. This might be contrary to the desires of SNILD,” he pointed out.
He said the amendment then adds a unique progressive fee structure for fees. Jackson said the license fees increase as the more machines and enterprise has.
He said the progressive fee structure means that as the business grow, Saipan benefits with more and more fees.
Jackson said the final addition reads that the rate set are for all of the electronic gaming machines of the business.
He said businesses that grow and have more machines and move into a higher tier will pay a higher license fee for all of their machines at the higher tier rate.
“When the economy contracts such as after a severe typhoon or another pandemic, fees go down in proportion to the reduction of machines of the businesses. This is a very fair fee structure,” he added.
Yumul stated in the legislation that by structuring the license fee to increase based on the total number of machines operated in the business, the collection of more revenue without overburdening the e-gaming business is possible.
The SNILD Gaming Committee chaired by Rep. Edwin K. Propst (D-Saipan) approved some amendments to the bill offered by Rep. Christina E. Sablan (D-Saipan).