Responding to a request from the House Ways and Means committee, the Commonwealth Casino Commission projects taxes from Saipan casino VIP gaming revenues will reach $33 million for the next fiscal year.
But they add the estimate is a conservative one, given it only covered revenue for VIP gaming and not slot or table gaming.
Ways and Means chair Rep. Antonio Sablan (Ind-Saipan) had written to regulators asking for information to help plan next year’s budget and “to know the amount of funds available for appropriation” under the Saipan casino law. He asked to be provided the amount of funds presently available for appropriation, and a projection of funds that would be available for appropriation under the casino law for FY 2017.
In a letter to Sablan on Tuesday, acting commission chair Joseph Reyes notes the appropriate agency to provide the information should be the Department of Finance but says since the commission is the CNMI regulatory agency that oversees and monitors the casino’s daily operations following the issuance of the exclusive Saipan casino license and the opening of the Best Sunshine Live gaming activities, “we have some specific financial information that can assist you in your revenue projection.”
The commission says that based on rolling chip volume for the last seven months generated by the casino—or Imperial Pacific International (CNMI) LLC, doing businesses as Best Sunshine Live a the T-Galleria—they have rolled an average of $2 billion monthly.
The average theoretical holds for the house, or Best Sunshine, is 2.8 percent of the amount rolled, the commission said.
As such, one can multiply $2,000,000,00 x 2.8 percent to get $56,000,000 per month.
The current Gross Gaming Revenue Tax, or GGRT, is based on the BGRT rate for this amount at 5 percent.
Thus, $56 million times 5 percent equals $2.8 million GGRT per month.
And multiplying $2.8 million x 12 months = $33,600,000 GGRT.
Therefore, the project amount of GGRT from IPI for fiscal year 2017 is $33,600,000, the commission said.
“This projection is considered conservative as the formula used in the calculations factored the GGRT only from VIP casino operations,” Reyes adds. “The BGRT/GGRT from the Mass Gaming Tables, slot machines, Noodle Restaurant, and the casino bar are not included in the rolling chip calculations.
“However, their exclusions can be considered acceptable to cover any unforeseen reduction in the gaming activities. Another important consideration is the gaming industry’s across-the-board economic impact on almost all facets of our economy. This means that as the casino industry continues to prosper, we should see an increase in the BGRT across all sectors of the business community. Thus, you should expect an increase in the FY2017 estimated BGRT for the CNMI,” the commission’s acting chair said.