Bartley A. Jackson, general manager of MP Holdings LLC that owns Saipan Vegas in Chalan Laulau, told the House of Representatives Gaming Committee Friday that they want to help the CNMI resolve its financial problems but the company has to also remain viable in order to be able to do that.
“We want to help but we cannot help if we cannot survive,” said Jackson during a meeting of the Gaming Committee last week.
He said with the Gaming Committee’s understanding and cooperation, they are confident they can find a workable accommodation that will help the Legislature raise additional funding and allow MP Holdings LLC to remain in business.
Jackson was supposed to conduct presentation about their company and the impact to their business of Saipan Local Law 22-6, but Gaming Committee chair Rep. Edwin K. Propst (D-Saipan) asked him to instead provide them a copy of the presentation or just reserve it for their next meeting because they didn’t have enough time that day.
SLL 22-6 essentially doubled the license fees of e-gaming machines. Jackson recently wrote Saipan and Northern Islands Legislative Delegation chair Sen. Vinnie Vinson F. Sablan (R-Saipan), requesting on behalf of the owners and employees of Saipan Vegas and Club 88 to have SLL 22-6 amended. He said Saipan Vegas and Club 88 are willing to pay an additional $500 license fee per machine.
Jackson said that, in its current form, SLL 22-6 will force them to close their doors, and that 70-plus individuals will lose their jobs and millions of dollars will be lost to the CNMI treasury.
He said his goal at that meeting was to share the financial dynamics of the e-gaming industry and provide some understanding of how their businesses work. “We want to help you make the most informed decisions,” he told the committee.
Jackson said MP Holdings LLC first entered the e-gaming industry in 2016 with the purchase of Club 88 in Garapan and then opened Saipan Vegas in Chalan Laulau in 2018.
“To the outsider, the industry looks easy and extremely profitable. Unfortunately, that is far from reality,” he said, adding that if the e-gaming industry is profitable, why are there only two e-gaming venues remaining in the CNMI?
He noted that Club C e-gaming at Kanoa Resort had to close due to slow play pre-pandemic and had been losing money for years when it closed. He said casino licensee Imperial Pacific International, which has over 50% of its floor space dedicated to e-gaming, apparently suffered the same fate. He said Saipan Vegas and Club 88 are the last two remaining e-gaming venues on Saipan.
He pointed out that MP Holding is a contributing member of the community. Every year the company gives away thousands and thousands of dollars to community charities in need of assistance, he said.
“The challenges of the past 18 months are not lost on us. We know that the community is hurting,” he said.
In response to a committee members’ questions, Jackson said he works for Bridge Capital and directly reports to the company’s principals, John Baldwin and Shawn Scott.
He said MP Holdings LLC and Bridge Capital have no business relationship, but they have the same shareholders. He said Mariana Entertainment, which owns Club 88, is the subsidiary of MP Holdings LLC. He said MPL Holdings LLC has been profitable some years but not all, especially last year when the company lost millions.
As for Club 88 and its near-closure, Jackson said they actually shut down 20% of its operations.
He said the initial plan was to shut down Club 88 immediately, but when they sat down and looked at the numbers, they realized that they had already prepaid $100,000 in licensing fees earlier in the year.
He said Club 88 has 73 machines and those needed to be licensed on an annual basis so last August after the imposition of Saipan Local Law 22-6, seven of those machines became due for renewal. So the decision was made not to renew those seven machines and close them down, Jackson said. This month, another eight machines became due for renewal and those were also not renewed.
“The decision was made to close piecemeal,” he said, emphasizing that they “absolutely did not try” to deceive the public when they first announced that Club 88 would be closed immediately.
In response to the questions of Gaming Committee vice chair Rep. Christina E. Sablan (D-Saipan), Jackson said he is aware that Bridge Capital holds a qualifying certificate and that he knows the terms and conditions of that qualifying certificate. He said he is also aware that CNMI law prohibits qualifying certificate holders from having an interest or license on gaming.
Jackson said Bridge Capital or any of its principals are not in violation of the qualifying certificate because Bridge Capital, which is a holder of such certificate, has nothing to do with MP Holdings LLC.
He said he is not aware there been any comingling of funds in Bridge Capital and MP Holdings. “Accounts are separate. Books are separate. Everything is separate,” he said. “Whether or not you might have a common pair of eyes reviewing financials certainly is no indication that there’s any kind of overlap relative to this issue.”
Propst said there was a complaint that the Saipan mayor was not informed of SLL 22-6l and that Jackson did not submit comments on the legislation. Propst cited how the Saipan Mayor’s Office was informed about the bill and the process that led to the signing of the bill into law.
After consulting with their counsel, Michael Dotts, Jackson informed the committee that they are willing to disclose their financial record in a private meeting.
Propst thanked Jackson for coming and answering their questions.
“I do believe that it is unfortunate how everything came to be. The fact that there was a lawsuit and we also had to see an ethics complaint against one of our colleagues…was a bit surprising,” Propst said, referring to MP Holdings LLC’s and Mariana Entertainment LLC’s lawsuit against the Department of Finance and ethics complaint against Rep. Ralph Yumul (R-Saipan) over the passing of the bill.
Propst said he just want to say that they are not here in bad faith and that they are not here to try to bring the company down. He said there was an opportunity to look at a revenue-generating bill and that he can assure that they did not have a sinister plot.
“So we will move forward through discussion and dialogue and we can do it amicably without any rancor or animosity. I hope we can continue forward in that direction,” Propst told Jackson.
Some employees of Club 88 and Saipan Vegas were in the gallery of the House chamber during the meeting.
Jackson thanked Propst for the opportunity to meet as they believe in constructive conversation and discussion. “As I told you I’ve been here for 31 years. We all know that kind of challenges the CNMI is having now as a result of the pandemic and we want to be part of the solution,” Jackson said.
Jackson is a former board member of the then-Marianas Visitors Bureau, which is now the Marianas Visitors Authority. He previously worked for Pacific Islands Club and DFS.