Palau House Of Delegates Approves Casino Gambling

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Bill moves to Senate where it could face stiff opposition

By Jose Rodriguez T. Senase

KOROR, Palau (Island Times, Nov. 25, 2014) – As expected, the House of Delegates (HOD) passed in the third and final reading on Friday, November 21, 2014 the proposed law that will establish and regulate an exclusive casino gaming license in this island nation.

The twelve delegates present voted 11-1 to approve the measure. Those who voted for the bill were Speaker Sabino Anastacio, Vice Speaker Alexander Merep, Floor Leader Mario Gulibert, and Delegates Sebastian Marino, Marhence Madrangchar, Yutaka Gibbons, Jr., Jonathan Isechal, Lee Otobed, Marino Ngemaes, Swenny Ongidobel, and Masasinge Arurang.

The lone "No" vote came from Delegate Frank Kyota of Airai.

Delegates Lentcer Basilius, Lucio Ngiraiwet, Noah Kemesong, and Gibson Kanai were not present during the voting on the casino bill. Except for Kanai, who, along with Kyota, are opposed to casino gaming, the three other delegates are supporters of the casino bill.

Though he voted for the casino bill, Gulibert said he voted with reservations "out of respect for those who opposed the introduction of casino gaming to Palau".

The measure was then transmitted to the Senate for its consideration that same day.

Several more changes were incorporated to the casino bill before it was passed in the final reading by the HOD.

These changes include an increase to the casino license fees.

The version approved on second reading provides that the license holder shall pay $50 million for the first year of the term of the license to cover the first, 49th and 50th years of the casino license fee. The amount was increased to $300 million in the version approved in the third and final reading.

The final version provides that the casino license holder shall pay $50 million annually beginning the sixth year of the license, and on through the 50th year. In the version approved in the second reading, it was stated that the license holder shall pay $16 million annually beginning the second year of the license, and on through the 48th year.

In an interview, Isechal, who co-sponsored the bill together with 12 other delegates, hailed the passage of the casino bill as a "milestone".

"As Chairman of the Ways and Means Committee, I wish to thank the Speaker, Vice Speaker, and Floor Leader for leadership, support, and guidance for the passage of this "milestone legislation," he said.

"The passage of this Act is consistent with Article IX, Section 5, Sub-section 20 of the Constitution which states that one of the duties of the OEK is to provide for the general welfare, peace, and security of our people and of the Republic of Palau," the Peleliu Delegate added.

Isechal said that he hopes that his colleagues in the Senate will follow their lead and approve the casino bill.

In a press release sent to the media, said the passage of the casino bill is for welfare of the country and its people.

"The House of Delegates is convinced that the national government needs to consistently explore new ways to fund its operations and to provide the people of Palau with basic benefits such as education, health care, hospital services, scholarships, affordable power and a reliable water and sewer system," the press release states.

The House stated that the introduction of casino gaming will help address financial problems that Palau is facing.

It was noted that the Republic’s government programs have many unfunded liabilities, which places the national government in a dire need for funds: The Republic’s Social Security System is confronted with an annual shortfall of $1,700,000 and unfunded liability of $ 108,000,000; the Civil Service Pension Plan’s unfunded liability amounts to $103,900,000 and other National Debt from Asian Development Bank (ADB)’s Loan of $ 28,000,000 and others; and the National Scholarship Fund has an average annual shortfall of almost $1,000,000.

The House says that it sees itself confronted with the choice either to tap into new markets or to accept the reality that the welfare and quality of life in the Republic of Palau will drastically decrease.

"The Casino Bill will allow the national government to create the revenue needed to continue its operations and to provide the people of the Republic with the benefits they need and deserve. Approval of the Casino Bill will broaden the economic base of the Republic and bring new economic incentives to our beautiful island nation," the HOD media release further states.

"Furthermore, through the tight fee schedule the Casino Bill sets forth ($300,000,000 initial fee upon issuance of the license; $50,000,000 annual license fee for the first 5 years of the license; and $100,000,000 annual license fee for the remaining 45 years of the license) the bill generates continuous funding for the Republic that far exceeds any amount promised, and provided for, by the Compact of Free Association," it adds.

The media release concludes by saying that, "The welfare and quality of life for Palauans remain a priority concern of the House of Delegates. The House of Delegates believes that this Casino Initiative will take Palau into a next economic frontier."

Most of the people that are against casino oppose it on moral grounds. They argue that casino will bring many social ills like gambling, crime and family problems.

Meanwhile, two senators have expressed their strong disagreement to the casino bill.

In phone interviews, Senate President Camsek Chin and Senator J. Uduch Sengebau-Senior said they will vote against the casino bill once the Senate takes up the matter.

Chin said the people’s voice and not his personal opinion will matter how he will vote on the issue.

"The people we represent have already twice rejected casino gaming in referendums. It is very crystal clear that they do not want casino," he said.

In the latest referendum held in 2011 during the time of former President Johnson Toribiong, 75.5 percent of Palauan voters voted against casino gaming.

"We should not even discuss it," the Senate President added.

Senior said that she does not believe that casino is answer to Palau’s problems.

The lady senator also took issue of the Bill’s provision excluding citizens from casino gaming.

"If it is good, why do we exclude Palauans," she stated.

She said that particular provision is also a violation of the Equal Protection Clause of the Constitution. "It discriminates against a certain race.

Island Times tried to contact Sen. Toribiong, who supported a similar proposal back in 2010, for his position on the latest casino bill, but was told that he is off-island.

Of the current members of the Senate, four of them (Senators Toribiong, Mlib Tmetuchl, Regis Akitaya, and Hokkons Baules) voted to put the casino issue before voters last 2010. Island Times was not able to get their comments on the latest casino bill.

The current Senate members who voted against the 2010 casino measure were Sens. Surangel Whipps Jr. Kathy Kesolei, Mark Rudimch, and Raynold Oilouch.

President Remengesau has not yet publicly stated his position on the latest casino bill, though he vetoed a similar measure in 2003. Remengesau also voted against casino while a member of the 8th Senate in 2010.

The Bill provides for the establishment of the Palau Gaming Commission (PGC). The powers and duties of the PGC, as proposed in the Bill include: 1) To issue no more than once casino license; 2) To conduct hearings pertaining to a casino license or any violation of rules and regulations promulgated by the Palau Gaming Commission; 3) To promulgate rules and regulations in accordance with the Administrative Procedure Act in Title 6 of the Palau National Code; 4) To detain and remove undesirable persons from any casino; and to levy and collect fees, fines, and penalties.

The proposed law also provides that a casino license once granted is valid for 50 years, and that citizens and residents are prohibited from gambling at the licensed casino.

House Bill No. 153-15S, as the measure is officially known, was introduced by 13 members of the HOD led by Speaker Anastacio on September 4, 2014. The passage of measure by the House came after public hearings conducted in all 16 states of Palau and a fact-finding trip to the Commonwealth of the Northern Mariana Islands (CNMI).

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