A pair of electronic slot arcade operators in the Commonwealth of the Northern Mariana Islands have reportedly filed a lawsuit against the local government’s recent move without any consultation to effectively double their tax rate.

According to a report from Inside Asian Gaming, the legal action was lodged yesterday by Mariana Entertainment LLC and MP Holdings LLC, which are responsible for the American territory’s Club 88 and Vegas Saipan electronic slot venues respectively. The source detailed that the two plaintiffs are angry that legislators unilaterally passed a measure last week that will oblige them to top up their current taxes with the greater amount of either 15% of their net gaming revenues or a $2,500 per machine duty.

Dialogue deficit:

The lawsuit filed with the Superior Court purportedly alleges that the new tax law is illegal due to the fact that the Saipan and Northern Islands Legislative Delegation did not first issue a committee report or conduct a public hearing. The complaint furthermore argues that the fresh tariff represents a conflict of interest because of an earlier contention from beleaguered casino operator Imperial Pacific International Holdings Limited that it should be granted exclusive rights over all gaming activities on the main island of Saipan.

Reportedly reads the complaint…

“The law was proposed by Representative Ralph Yumul, the brother of the Chief Executive Officer for Imperial Pacific International Holdings Limited, the plaintiffs’ direct competitor, who has a conflict of interest in this matter and he also voted for its passage. For this reason, passage of the bill was invalid.”

Troubled target:

Inside Asian Gaming reported that the casino license held by Imperial Pacific International Holdings Limited, which is responsible for the unfinished Imperial Palace Saipan development, is currently suspended owing to the firm’s failure to honor a range of tax and certification commitments. The Hong Kong-headquartered firm purportedly missed its annual $15.5 million fee in August of last year while additionally failing to stump up an associated $3.1 million regulatory duty and is now facing the real prospect of being wound up with aggregated debts of well over $25 million.

Pessimistic possibility:

A consultant working for Mariana Entertainment LLC, Gus Noble, reportedly asserted that the government’s attempt to increase the taxes paid by local slot arcade operators ‘may have the opposite effect’ and prompt some firms in the electronic gaming industry ‘to shut down entirely.’

Noble reportedly stated…

“If this happens, despite the imposition of a new tax, the citizens of the Commonwealth of the Northern Mariana Islands will receive zero revenues from electronic gaming.”