Gross gaming revenue (GGR) tax is reportedly not being collected from gaming operator Imperial Pacific International (CNMI), LLC operations on Saipan and a lawmaker there is questioning why, according to Asia Gaming Brief.
No section of Public Law 18-38, said Rep. Edwin K. Propst, prohibits the government from imposing a tax on the casino operator’s GGR. Propst added that Imperial Pacific, which enjoys exclusive gaming rights on Saipan, only pays a $15 million annual license fee along with a 5 percent business gross revenue tax, which is standard.
He said, “Fifteen million dollars a year is peanuts for what they are raking in when compared to what we would be receiving if we actually had a gross [gaming] revenue tax implementing from the beginning.” Propst added, “We have the only casino industry in the world that charges zero on gross gaming revenue taxes,” according to the news agency.
That could change, however, as Vice Speaker Janet U. Maratita, introduced legislation earlier this year that would levy a five percent tax on all Commonwealth of the Northern Mariana Islands (CNMI) gaming revenues. House Bill 20-31, according to the report, could become law and come into effect within two years. Maratita wrote on the bill, “Indeed, the CNMI government has been incurring a budget deficit since it first became a Commonwealth in 1978 and then governor Carlos S. Camacho ended his term in 1982 with a $5 million deficit,” as reported by the news agency.
Maratita said the new gaming industry in Saipan remains largely untaxed and, “The exclusive license fee that is paid currently is arguably a fair price for a legal monopoly, but even an entity that enjoys exclusive gaming rights should be paying their fair share of taxes.”
Best Sunshine International, a subsidiary of Hong Kong-based Imperial Pacific currently operates the Best Sunshine Live in the T Galleria shopping center on Beach Road in Garapan, Saipan. The group made the decision to launch the build the temporary casino, which launched late in 2015, until its Grand Mariana Casino and Hotel Resort on Saipan opened.
In addition to the havoc reaped upon the early construction of Imperial Pacific’s Phase I casino resort by Typhoon Soudelor in 2015, a myriad of other minor and major setbacks, including a recent construction site fire, have kept the company racing to meet opening deadlines and avoid costly fines if the casino resort doesn’t open on time.
Hoping to extend the deadline to complete construction of its hotels and casinos, earlier this week, the company, which operates as a subsidiary of Imperial Pacific International Holdings Limited (HKG:1076), submitted a request to amend their casino license agreement.
A soft launch for the Imperial Pacific Resort is expected by the end of the month. The casino resort is the first to open of the company envisioned 20, six-star hotels and 11 casinos at a cost of $7 billion.