POOR ECONOMY SHUTS SAIPAN POKER PARLORS

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By Jude O. Marfil

SAIPAN, CNMI (Marianas Variety, July 14) - The cash-strapped Commonwealth of the Northern Mariana Islands government stands to lose US$624,000 in potential revenues annually after five poker establishments on Saipan decided to shut down due to the uncertainty of the CNMI’s business climate.

The five poker parlors operate 52 machines whose owners pay US$12,000 per year per machine in license fees.

Legal operators also pay 3 to 5 percent in gross business receipt taxes depending on the income, withholding tax of employees and jackpot tax equivalent to 20 percent of single wins over US$1,000.

The five poker parlors were among the 110 establishments with 1,427 poker machines inspected by the commerce department’s enforcement division.

Paul Trombetta, spokesman of Amusement Operators Association, attributed the closure to "unfair competition" from illegal poker owners.

"The poker business has become unprofitable. Certainly, we are not expanding because of the high level of uncertainty. There is a lack of tax compliance that is hurting legal operators," said Trombetta.

In the past one and half years, Trombetta said his company has pulled out 35 percent of its poker units.

"We are now diversifying into the food and beverage business. (The government) has just created an environment that has made our (poker) operational expenses higher than (those) that have been operating illegally," he said.

Trombetta said Governor Juan N. Babauta’s proposal to increase the poker license fee coupled with the impending people’s initiative to limit the operation of poker establishments on Saipan have created "confusion" among poker industry players.

The Saipan Chamber of Commerce’s proposal to limit poker establishments to Garapan is "unethical" because the organization should be promoting business and not curtailing its operations, Trombetta said.

"We question the morality of that initiative. It just does not seem right to me because if you shut down one sector, other industries will stand to benefit," said Trombetta. "How would they feel if, say, there were a proposal to regulate gift shops, for instance?

"Our industry is being pulled and tugged on all sides. They seem to want us to go away," said Trombetta.

The chamber’s proposal calls for the removal of poker establishments within 250 feet of public or private schools, day care centers, childhood centers and churches.

It would also ban poker parlors from operating near commercial laundromats, grocery stores and pawnshops.

"At the rate we are going, it is impossible to transfer our (poker) business. That alone will cost at least US$75,000, an expense we cannot afford right now," said Trombetta.

July 15, 2005

Marianas Variety: www.mvariety.com

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