Concerns Over CNMI Electronic Gaming Bill Clarified

admin's picture

House official says license fees don’t apply outside hotels

By Alexie Villegas Zotomayor

SAIPAN, CNMI (Marianas Variety, Dec. 12, 2013) – Allaying the concerns of CNMI Governor Eloy S. Inos over the proposed license fee for electronic-gaming machines, Rep. Tony Sablan has clarified some of the issues that are stumbling blocks to the bill’s enactment.

Sablan told Variety yesterday, "I communicated with him this morning. We discussed some of his concerns."

Sablan learned that the governor was concerned that the proposed reduced license fee of $2,500 for electronic-gaming machines could also be applied to poker machines.

"I told him, if we read the language, it says ‘for machines located in hotels.’ That does not apply to fees outside the hotels," he said.

He further clarified that it was never the intent of the bill to charge the same license fee for machines outside the hotel.

Variety checked a copy of the bill and found what could be the governor’s concern.

The bill states, "(6) Notwithstanding 4 CMC §1503 (a)(2) and (5) or any other law imposing a license fee, the license fee for poker amusement machines, electronic-gaming machines or electronic table games as defined in 6 CMC §3154(a)(a)(4) and situated at a hotel pursuant to 6 CMC §3156 (b) shall be $2,500 per machine or 15 percent of net gaming proceeds, whichever is greater."

The bill did mention the word "poker"; however, as clarified by the bill’s author, the machines have to be in a hotel.

Further, Variety learned that the electronic-gaming machines do have poker games in them among a variety of other available games.

Sablan also assured Inos that it would be a remote possibility to expect poker-machine operators to relocate to the hotels.

He explained, "There are not many hotels that will qualify under the electronic gaming. You have to have a minimum number or rooms or you have to be connected to a golf course," he said.

Sablan said that he provided Governor Inos with all the materials, including committee reports.

He said Governor Inos will continue to have his legal team look at the bill.

Sablan doesn’t foresee why an investor in the electronic-gaming operation would spend $2,500 per poker machine when an electronic-gaming machine offers more gaming options than just poker. "Why spend another $2,500 on a poker machine that provides nothing but poker. It doesn’t make sense."

Poker machines on Saipan are assessed a $12,500 license fee.

With the government intent on fulfilling its financial obligations to retirees and active employees who withdrew their contributions to the Fund and now demand payment of their interest, with the need to raise the money for insurance coverage that is expected to be between 30-45 percent higher, the government is scrambling for whatever revenue it can raise to make ends meet.

Other revenue

In a separate interview with Variety, Senate Floor Leader Ray Yumul explained how revenue is to be derived from electronic-gaming operations.

He said that if the machine earns an average of $50 per day on a 365-day year cycle, this would result in $18,250.

He said, after factoring in the 10 percent for payouts and winnings, which would leave a balance of $16,425.

15 percent of that is $2,463.75 which is less than the $2,500 license fee.

He said, in this example, the machine will be paying the higher of the two: the $2,500 fee.

But he said the license fees are not the only source.

Yumul, who is the chairman of the joint conference committee on the bill, said that there’s still a 5 percent BRGT on operations.

He said each machine is estimated to cost $21,000.

If this is assessed the 5 percent excise tax, it will yield $1,050 in revenue per machine.

"We expect to bring in at least 500 machines initially," he said.

He told Variety, that with 500 initial machines, it would mean approximately $500,000 in excise taxes alone.

He said this is just revenue for the machines.

There are other revenues associated with the construction of the gaming floor and the facility itself.

Another revenue-generating bill

Sooner or later, bicycle and moped users will be paying registration fees as a bill looks into starting to collect fees in order to ramp up revenue for the government.

House Bill 18-174 introduced by Rep. Christopher Leon Guerrero and eight other lawmakers found that the Department of Public Safety has yet to enforce laws relating to bicycles which have been in the books for over 30 years.

The bill amends the vehicle code, 9 CMC §2104 (a)(1)(2) and (3).

It was in 1982 when P.L. 3-11 required registration for bicycles at $1.50 which was later increased to $3 by P.L. 16-2 Section 8.

The lawmakers find it imperative now to enforce revenue-generating laws and start collecting fees that have not been collected in the past.

In this pursuit, the lawmakers propose that the new registration fees will be: bicycles, $7.50; mopeds, scooters, and motorcycles up to 100 cc, $12.50; motorcycles and scooters over 100 cc, $17.50; pickups, jeeps, sedans, automobiles, and other motor vehicles not exceeding six passengers or one-half-ton capacity and weighing less than 2,000 pounds, $25.

The bill further lists proposed fees for trucks and self-propelled equipment and machinery.

It also proposes to reimburse those who paid more than $25 in registration fees in 1983 for the amount in excess of $25.

50 percent of the revenue will go into a special account for the Bureau of Motor Vehicles with the Department of Public Safety Commissioner in consultation with the BMV director as the expenditure authority.

Rate this article: 
No votes yet

Add new comment