The Tinian Casino Gaming Control Commission reiterated yesterday its position to sit on the application of potential investors and new managers of the Tinian Dynasty Hotel & Casino until more investigative and licensing fees are paid. Tinian lawmakers, however, believe the need for these additional fees are nebulous and unneeded, as the lack of casino revenue funding streams to municipal programs have halted with the island’s casino operations.
Tinian delegation lawmakers said in a statement yesterday that the lack of a Tinian local budget is not a result of a willful failure to pass a budget but a result of the closure of the Tinian Dynasty casino and consequently, the lack of any funding stream or casino license fee deposit.
Lawmakers said that if they passed a local budget based on current estimated revenue projection, they would be violating a fiduciary duty to refrain from incurring an unfunded debt for the municipality. This would essentially authorize agencies to “write checks knowing there are no funds in the account,” lawmakers said.
Lucy L. Blanco-Maratita, the commission’s executive director, said yesterday that the processing of the Tinian Entertainment Company/Chinese Strategic Holdings Ltd.’s casino license application is on hold until they pay the required additional investigative/licensing cost deposit of $100,000.
“The commission cannot proceed and award a casino license without a finding of suitability, and in order to find an applicant suitable, the commission needs the investigate report to make that determination,” she told Saipan Tribune.
“The additional investigative fee is necessary in order to complete the investigations,” she added.
Meantime, the commission could not confirm reports that the Tinian Dynasty casino would resume operations on Nov. 15.
Maratita said they have heard of the report and are awaiting confirmation.
“What they need [to do] is to submit a reopening plan and they need to pay some of the fees that are required before they can open,” she said yesterday.
Since the casino closed, the Dynasty reported that more than 150 employees have been laid off. In September, Tinian Mayor Joey San Nicolas told Saipan Tribune that he had informed a number of employees of their last day of work, as casino revenues reportedly provide funding for 43 positions within the Tinian gaming commission, Tinian Mayor’s Office, and the Tinian Municipal Council.
‘No need for more fees’
In a statement, Sen. Frank M. Borja, chairman of the Tinian Legislative Delegation, and delegations members said it was a “mystery” as to why the commission’s required $100,000 fee is still needed.
The Tinian and Aguiguan Legislative Delegation were clarifying the issues surrounding the non-passage of a local budget for Tinian and Aguiguan for fiscal year 2016 based on casino gaming revenue projections.
Borja noted that in June/July 2014, Mega Stars, Inc.—a new investor planning to take over the Tinian Dynasty operations—filed its application for a casino license with the Tinian gaming commission and deposited the requisite fees. More than one year later and based on undisclosed reasons, the commission has yet to decide on Mega Stars’ casino license application.
Subsequently, Borja said, in February 2015, another and the current investor interested in taking over Tinian Dynasty Hotel & Casino—the Tinian Entertainment Co. Ltd.—filed its application for a casino license at the commission and deposited the required fees. But to date, the commission had not decided on the application.
Tinian Dynasty temporarily shut down its casino operations in August due to financial constraints and difficulties.
Because of this, there has been no gaming revenue collection deposited at the Tinian Municipal Treasury since September 2015, Borja said.
“The TCGCC and its personnel continued to be paid up until mid-September 2015 when the entire casino gaming revenue was depleted. Although the lack of funding for the operations of the TCGCC has stalled its general operations, there is no casino to inspect due to the closure of Tinian Dynasty casino,” he said.
“Contrary to what has been published in the newspapers, the TCGCC does not need to wait for a local appropriation for TCGCC to continue its review of the casino license application of TEC, the current investor planning to take over the operation of Tinian Dynasty Hotel & Casino. In February 2015, TEC paid an investigative fee of $100,000 to the TCGCC to conduct its suitability investigation. It is a mystery why TCGCC now needs an additional $100,000 to conduct and conclude its pending TEC investigation. “
“Moreover, the TCGCC should not wait for local appropriation to continue its work. During this critical time of the casino industry, the work of the TCGCC should not be dependent on whether they get compensated or not. They remain commissioners whether or not there is budget so they must act accordingly.”
Borja said that although the Revised Tinian Casino Gaming Control Act mandates the delegation to pass a local budget for the operations of TCGCC on or before Oct. 1, 2015, there needs to be a “funding stream” before they start deliberating on the Tinian local budget.
“It would be fiscally irresponsible of the delegation to pass a local budget knowing that the casino is closed and there is no gaming revenue to collect at this time.”
Difficult to project revenue
Borja said the delegation is cognizant that the revenue projection of the TCGCC is only an “estimated” projection. “However, the estimated projection must be realistic, collectable, and based on the previous years’ collection trends in order for the delegation to confidently rely on such numbers.”
He noted, though, that the record would show that the commissions’ estimated revenue projections for the last three fiscal years have been grossly inflated.
“…Only about 50-75 percent of the estimated revenue projections have been collected by TCGCC,” he said.
Borja said the delegation has asked the commission if it intended to amend its estimated revenue projection for fiscal year 2016 due to the temporary closure of the Tinian Dynasty casino, to which the TCGCC replied in the negative.
These kinds of inconsistencies make it difficult for the delegation to confidently rely on such estimated gaming revenue projections when deliberating on a local budget for Tinian, he noted.
“Notwithstanding the closure of the Tinian Dynasty casino and lack of gaming revenue collection, the delegation will pass a local budget when there is a substantial deposit of the Tinian Dynasty’s annual license fee or when the casino opens, whichever is first. “Once a substantial casino license fee deposit is made at the Tinian Municipal Treasury and the funds are certified, the delegation will pass a partial Tinian local budget to appropriate the full amount to the TCGCC operations until such time that the Tinian Dynasty casino resumes its operations or there is another substantial amount deposited at the Municipal Treasury.
“…The delegation understands that there are many people affected by the casino predicament in Tinian but we ask for everyone’s patience while we sort through all the issues. But the longer the Tinian Dynasty casino remains closed, the less gaming revenue will be collected for the benefit of TCGCC and the Tinian community,” the delegation said in their statement.