Saipan casino operator Imperial Pacific International (IPI) is pleased with the performance of its one and only junket operator, even if the other four locally licensed junkets are giving the property a wide berth.
On Wednesday, the Commonwealth Casino Commission (CCC) of the Commonwealth of the Northern Mariana Islands (CNMI) held a hearing at which director Edward Deleon Guerrero withdrew the complaint he filed against IPI earlier this month for non-payment of its gaming license.
IPI was supposed to make its annual $15.5m payment to the CCC on August 12th, but only made partial payment of $5m. It wasn’t until this Tuesday that IPI forked over the balance, and the CCC warned that IPI may still face financial penalties of $50k per day for each day of the as-yet unexplained delay.
IPI’s financial squeeze is no state secret, as the company announced earlier this month that it expects to book a net loss for the first half of 2019 when it submits its financial report card by the end of this month. Much of IPI’s red ink is due to uncollectable debts from VIP gamblers to which the company directly extended credit.
Most other Asia-Pacific casino operators employ junkets as credit middlemen, which lessens the likelihood of the casino being stuck with the tab, but also lessens the profits from VIP gambling activity. IPI chose to take all the profit and all of the risk, a strategy that has contributed greatly to the company’s present predicament.
Saipan has issued five junket licenses to date, but the CCC heard Wednesday that only one of these five – South Korea’s Big Bang Entertainment – is actually delivering VIPs to IPI’s doors.
The Marianas Variety quoted IPI’s senior compliance VP Chuck McDonald saying that Big Bang was “doing a great job” bringing in VIPs from South Korea and Japan, which convinced the CCC to extend Big Bang’s junket license by another two years.
As for the other four licensed junkets that were supposed to bring in Chinese high-rollers, IPI’s on-again/off-again CEO Mark Brown said they’re currently ‘inactive’ on Saipan, in part because IPI’s “business is very slow and junkets at the moment don’t want to come here.” Brown noted that IPI’s still unfinished Imperial Palace currently only has one major non-gaming amenity, the Chairman M restaurant.
Brown claimed that IPI is eagerly awaiting news of the CCC’s handling of license applications from five new junket operators, but Guerrero said the CCC was still waiting for these would-be junkets to file their necessary letters of intent. In other words, it appears that these other five junkets also don’t want to come to Saipan until IPI gets its construction act together.
IPI said Wednesday that it currently has over 600 construction workers trying to finish the Palace, which the company claims is sufficient for the time being, as the current work is largely focused on the property’s interior. But IPI says it will eventually need to swell that construction crew to over 1,000, some of whom may or may not eventually join lawsuits filed by former workers for a variety of alleged labor infractions.
