Saipan casino operator Imperial Pacific International Holdings had a thoroughly positive 2016 but is closing out the year on a decidedly pessimistic note.
On Thursday, Bloomberg reported that Imperial Pacific had frozen a planned bond offering intended to help finance the construction of its permanent Saipan resort casino. Up till now, the company has been making do with Best Sunshine Live, a temporary yet wildly successful ‘training’ casino in a local shopping mall.
Investors reportedly sought a higher yield than the 10-11% Imperial Pacific had been offering, based on investors’ concerns that the property’s future was vulnerable to Saipan regulators changing local gaming laws.
Imperial Pacific planned to open the first phase of its permanent facility in time for the 2017 Chinese New Year celebrations, with subsequent phases to follow in the coming years. The total outlay for the project, which at its completion would boast 11 casinos and 20 six-star hotels, was tipped at over $7b. The scrapped bond offering was designed to raise up to $400m of this total.
Meanwhile, a former Best Sunshine Live VP of table games has filed a wrongful termination lawsuit in US federal court, in which he claims the property has been advising VIP gamblers how to structure their gambling activity to avoid US financial reporting requirements.
The Marianas Variety said Danny Ewing’s lawsuit alleges that Imperial Pacific allowed a Best Sunshine VIP to deposit $400k with the casino without filing the required reports with the Financial Crimes Enforcement Network (FinCEN). Ewing also accuses the casino of non-implementation of anti-money laundering programs required by all casinos with over $1m in annual revenue.
Ewing claims he was fired in August after refusing to go along with Best Sunshine’s illegal activity. Imperial Pacific issued a statement saying it had yet to read Ewing’s complaint and thus couldn’t comment on his allegations. But the casino operator said it “follows all employment laws and regulations” and would “vigorously defend all lawsuits” claiming otherwise.
In November, media reports claimed FinCEN had opened an investigation into Best Sunshine’s dealings with high rolling gamblers. Imperial Pacific subsequently denied knowledge of any such investigation. The Commonwealth of the Northern Mariana Islands is a US territory, which puts all its gaming facilities under US authority.
