Saipan casino operator Imperial Pacific International (CNMI) LLC has written to the Commonwealth Casino Commission (CCC) of the CMNI requesting abatement of its US$15.5 million annual license fee, citing inability to pay due to the impact of COVID-19.
In a letter dated 11 August, IPI CEO Donald Browne reveals the company is unable to pay its 2020 license fee, which was due on Wednesday 12 August, after closing its casino in March.
“We are now in August and IPI has had no income for the last five months,” Browne explains.
“It does not appear that international flights will resume until January 2021. It does not seem likely that tourism to the CNMI will begin again until May 2021. In all likelihood IPI will remain closed, and have no income, for the next eight months.”
Noting that the company has had to furlough multiple workers while paying repatriation costs, as well as maintaining some operating costs and wages for remaining employees, Browne describes COVID-19 as a “classic force majeure” – an unforeseen circumstance outside of IPI’s control – relief for which he says is provided for in the Casino License Agreement.
“Pursuant to Section 25 of the Casino License Agreement and because of the worldwide pandemic, IPI respectfully requests an abatement of the casino license fee for the year of 2020,” Browne writes.
The letter also calls for postponement of IPI’s annual US$3 million payment to support operation of the CCC itself until 30 days before Imperial Palace‧Saipan opens, suggesting “there will be no casino operations to monitor until IPI does reopen.”
Financial concerns are nothing new for IPI. As previously reported by Inside Asian Gaming, the company recently warned that it may have to permanently close its Saipan casino pending enforcement of the Pacific Rim ruling which IPI said at the time it was unable to pay.
The Commonwealth Casino Commission (CCC) also threatened to suspend the company’s casino license due to its failure to pay US$37 million into the community benefit fund as per its Casino License Agreement.
In May, the Commonwealth Utilities Corp cut off power to both Imperial Palace‧Saipan and the company’s head office for failure to pay its bills.
IPI shares hit a low of HK$0.010 last weekend, having fallen from HK$0.029 a week earlier and from a 2020 high of HK$0.101 on 9 January. The shares reached their all-time high of HK$0.360 in mid-2015.