Imperial Pacific Int’l Saipan Casino Exclusivity Remains In Limbo

Posted on: August 29, 2023, 07:43h. 

Last updated on: August 29, 2023, 10:58h.

Erik Gibbs Read More

Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

For years, Imperial Pacific International (IPI) has been at loggerheads with the Commonwealth of Northern Mariana Islands (CNMI) over its casino exclusivity in Saipan. A recent CNMI Supreme Court ruling shows that no one involved in the drama that’s been ongoing for more than five years knows how to take a stand.

Local media outlet Marianas Variety reported this week that the CNMI Supreme Court has determined that IPI, to a certain extent, is no longer entitled to casino exclusivity. This echoes previous court decisions and could help resolve the ongoing dispute over the Imperial Palace casino that has sat empty for several years.

The decision wasn’t a complete win for the CNMI and the Commonwealth Casino Commission (CCC), though. The Supreme Court also determined that the gaming regulator made a couple of mistakes along the way, and that IPI could recover its exclusivity if it settles its outstanding debts.

Close to the End of the Line

A little more than two years ago, the CCC suspended IPI’s license (even though Imperial Palace was nonoperational) after it missed several mandatory payments. Eventually, the embattled casino operator would owe the regulator hundreds of millions of dollars, the absence of which forced the CCC to halt its activity.

That didn’t keep IPI from continuing to fight, and the case made it all the way to the Supreme Court. In its ruling last week, the high court decided that, although the regulator was right to take action, it also should have adhered to an amendment in the gaming compact that triggered an extension for IPI to make certain payments.

That extension gives the operator until 2025 to make good on its obligatory Community Benefit Fund, an account that provides pay to certain government employees. At the same time, the court determined that the CCC must give IPI more time to get caught up on any outstanding payments.

IPI argued that COVID-19 was to blame for the closure of Imperial Palace, which other court justices denied. The Supreme Court, however, ruled that the operator does have a “force majeure” case. That’s despite the fact that its legal and fiscal troubles began well before the pandemic.

It’s also despite a U.S. Court of Appeals for the Ninth Circuit decision that sided with the CCC. Therefore, it has become apparent that there’s no consistency in the interpretation of IPI’s casino compact or the devastation it has caused the CNMI.

Future Still Uncertain

As of now, IPI still doesn’t have an active license in the CNMI. If it finds a way to pay all of its outstanding debt, that could change. However, given that many of the assets in Imperial Palace have been stripped away in order to settle some of its debts, the casino is nowhere near where it needs to be to reopen.

The CCC is trying to get more money out of IPI, which will likely prove just as difficult as every other attempt. It is reportedly due another $100K in fees tied to the ongoing legal case, and has approached the CNMI District Court for intervention.

The money is reportedly held by the court as a bond IPI had to pay when the regulator began its legal fight with the company. Because the CCC has had to shut down office space, let employees go, and work on a nonexistent budget, it needs all the help it can get to stay afloat.