Fines and Possible License Suspension for Imperial Palace
The Imperial Palace Casino is facing a license suspension and a $25 million fine to its parent company due to issues involving regulator fee payments.
A casino resort in the Northern Marina Islands is in a bit of hot water. It was announced this week that the Imperial Palace Saipan must pay a $25 million fine in six months to the local government or face even more penalties including potentially losing its operating license.
What’s The Deal?
Last week, the Commonwealth Casino Commission in the Northern Mariana Islands issued a fine against the casino’s owner, Imperial Pacific International Holdings. The operator has reportedly not paid its $15.5 million yearly licensing fee. the Commission says that the firm also did not pay its yearly regulatory fee of $3.1 million.
On top of that, the owner did not contribute to the Community Benefit Fund of the island in 2018 and 2019. This failure resulted in the lack of $20 million in contributions. Due to the failings of the operator, the Commission ruled that the operations must cease at the casino.
The license is suspended and will remain so until the parent company complies with the orders it received. The order is effective until May 10. Basically, the Commission has given Imperial Pacific six months to pay up or additional penalties will be enacted. The property is at risk of losing its license indefinitely if the parent company does not pay the penalty.
Things are not looking good for the casino. The project has seen issue after issue, from its inception. Back when the casino site was being constructed, many construction workers were injured. Vendors working with the property said they were not paid for the work they completed.
The company actually faced receivership in March due to the unpaid invoices. The US District Court on the Islands ordered the company to over $1.1 million to the Department of Labor. They were also told to pay a $800,000 escrow deposit and any back wages to casino employees or construction workers.
The company did as it was directed, so it did not face receivership. If they had not paid up, the receiver would have assumed full control of the casino resort, both in governance and finances. With the change, the company would also lose its ability to transfer interest, ownership, or control to another entity in which they have ownership, interest, or control.
Female employees have claimed that they were forced to do things with male guests, like swimming with them in bikinis. The women say they were continually harassed and complaints to members of management resulted in no changes.
The next issue came from the amount of gross gaming revenues the casino was earning. The temporary casino of the property was bringing in over $2 billion a month, which is a crazy amount. It was suspected that the parent company was working with VIP junket groups to bring in high rollers from China.
Later on, the company admitted that it had to write off hundreds of millions in unrecovered debts from high rollers who left without paying up.
Now, Imperial Pacific is no longer allowed to work with junket groups. This decision was made due to the changes by the government of China to stop its residents from traveling to gamble. The Commission apparently does not want to have to deal with any backlash connected to the operator and China if they are found guilty of bringing people in to gamble.
We shall see if the company will pay up and avoid additional penalties on the islands. Perhaps they will pay the fines quickly or they may wait until the six month time frame is almost up to make right with regulators.