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Northern Mariana Islands, Imperial Pacific accuse each other of breaching Casino License Agreement

The Commonwealth of the Northern Mariana Islands and its sole licensed casino operator, Imperial Pacific International (CNMI) LLC, have accused one another of breaching their Casino License Agreement.

The turn of events follows a recent request by IPI, which is currently developing casino resort Imperial Palace‧Saipan, for abatement of its annual US$15.5 million casino license fee in 2020 and subsequent threat by CNMI Governor Ralph Torres to suspend or revoke IPI’s license if the fee isn’t paid.

Last Thursday, the Commonwealth Casino Commission served IPI with a notice of complaint which read, “Defendant IPI’s material breach of stipulated agreement and the casino license agreement constitutes breaches of contract … the Commonwealth has been damaged because of IPI’s material breach of contract.”

The notice also said it “finds, declares and orders that IPI’s license to conduct gaming operations on Saipan be suspended until such time as the annual casino license fee is paid in full.”

However IPI has returned serve via a letter addressed to Governor Torres from IPI CEO Donald Browne in which he refers to the original Casino License Agreement signed in August 2014 allowing the company to “exclusively operate casino gaming activity on the island of Saipan.”

Browne notes that the legal US federal definition of casino gaming includes poker machines, slot machines and eGaming machines. There are currently two licensed electronic gaming machine operators on Saipan with around 310 EGMs between them and, separately, dozens of poker machine parlors with 500 machines.

“The CNMI has not only allowed casino games to operate outside of the exclusive license holder, but has allowed casino gambling to proliferate causing irreparable harm to the exclusive license through loss of revenue.

“There is no exclusion anywhere in the Casino License Agreement that allows for other parties to operate casino games. IPI did not expect the exclusive rights to casino gaming activity to be so easily breached.

“Allowing poker machines and eGaming to operate outside of the casino is a violation of the exclusive license IPI holds.”

Currently in the sixth year of the Casino License Agreement, Browne has requested the annual fee be postponed until the 15th year instead, in 2029.

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