Monday, October 15, 2007

148. FYI-Saipan Casino Act

One last --easy-- post on the Saipan Casino Act initiative.

EDIT: I haven't found the Saipan Casino Initiative on-line and can't link to it. But if you want a copy, let me know. I'm willing to make a few copies and pass them along.

At the debate, I complained that there was nothing in the bill that provided for INDEPENDENT regulators. Paduna said I was wrong (well, he SHOUTED that I was wrong, wrong, wrong). See if you can find any of these things:

1. a requirement that the commissioners NOT have any interest in the license-holder, casino operators or other gambling/casino interests.

2. a requirement that the commissioners NOT come directly from employment at the casinos.

3. a requirement that the commissioners NOT be able to go directly from their job as commissioners into the casino industry.

4. a requirement that the commissioners NOT have close family members with an interest in the license-holder, casino operators or other gambling/casino intersts.

5. a requirement that the commissioners NOT have close family members working in the
casino industry.

You won't. The SCA would invite the casino industry into Saipan WITHOUT INDEPENDENT REGULATION. And without independent regulation, the casino industry will be more likely to be corrupt, have illegal and unethical practices, and fail to pay over the benefits we're supposed to reap.

At the debate, the pro side insisted the Saipan Casino Act does not create a monopoly. They did this in two ways--1) saying because all indigenous could buy a share in the license-holder, there was no monopoloy; and 2) saying the indigenous compnay was only a "regulatory" monopoly.

1. See if you can find anyplace in the the SCA that permits a second company of all indigenous people to hold a separate license and operate casinos in competition to the first license-holder's casinos.

2. See if you can find anyplace in the SCA that says the indigenous company that will hold the license will be for regulation only and not for profit.

The SCA will grant THE EXCLUSIVE, and perpetual, PRIVILEGE by law to one and only one investment company for the license to operate casinos in Saipan. The company will be a business operating FOR PROFIT. This is a monopoly.

Monopolies do not have the usual market forces to help keep them in line. So not only will there be no independent regulation of the casino industry in Saipan, there will not even be market forces operating to make sure the casinos stay above-board.

There seems to be a growing notion that the appearance of casinos in Saipan would end the proliferation and prominence of poker arcades in our community. I'm not really sure how this is supposed to happen. (It was repeated over and over that casinos would be well-lit and our local people wouldn't go in there. I'm not sure the reasoning behind that analysis, either, but it would be inconsistent with the idea that demand for the poker-machines would be diverted to the casinos.) The closure of poker arcades hasn't happened in Tinian.

1. Find someplace in the SCA that changes our poker-machine laws.

One of the lures of the casino industry is the promise of wealth. But the casino industry does not create wealth--it doesn't take some natural resource and make it into a valuable product. It just packages gambling as fun and redistributes existing wealth. For the casino industry to "generate" income, people have to lose. The entire casino industry is premised on this simple fact. The machines and tables and games are all set up so that there are consistently more losers than winners.

One of the myths of the casino promise is that wealthy people play at the casinos and lose income they can afford to do without. This myth isn't entire false, which is why it is so attractive. There are wealthy people who play games at casinos and lose big money.

Will those wealthy people choose to gamble at casinos on Saipan or Tinian, rather than Macau or Singapore? I mean, really, if you were wealthy, where would you choose? I love Saipan and all of the CNMI, and I love it the way it is. I can't see casinos and neon-light as an improvement. And I can't see us ever getting to the point of being legitimately competitive with Macau and Singapore for those wealthy gamblers.

And then there are the others, not so wealthy gamblers, losing money at casinos that they can't afford. These might be tourists or residents. They might be our soldiers and sailors stationed on Guam. Casino income is a reverse or regressive tax--taking money from those most desperate to try their luck.

And while casino owners and operators usually make profits (with the notable exception of the Tinian Dynasty), people in the community don't necessarily see an improved lifestyle. This is reflected in the increase in bankruptcies in communities with casinos. This is reflected in the fact that Las Vegas has the highest rate of home mortgage foreclosures in the country right now, and a depressed housing market.

Just be sure you realize there's NO GUARANTEE in the Saipan Casino Act.

Proponents of the SCA hype casinos as "the only alternative" that Saipan has to get out of the economic slump. This is a lie. Other communities in the past--going back for centuries--have had times where they faced economic hardship. They didn't have to turn to casinos to recover. We don't either.

And just because other communities have chosen to have casinos is no reason for us to do the same. We aren't lemmings. We have a unique culture and beauty that we can develop.

We should work on building the community, rather than just building the economy. The community encompasses economic aspects, but it looks at the larger picture and works from there. I agree with Tina Sablan that we need honest government and an investment in our people and culture as a basis for promoting our fledgling economy. We should stop looking for the one-trick pony to ride (like the garment industry, EDIT-a certain kind of tourist-EDIT, casinos) and start promoting initiatives by our resident population for small and medium-sized enterprises that will build a solid base for happy community life.


Pragmatic Plato said...


The link you provide is not to the SCA Initiative. I have not been able to get an authorized online copy of the Certified Saipan Casino Act Initiative. If you have a link to one or a digital copy please let me know. So far I have been relying on documents that I have found on various blogs. Thanks.


lil_hammerhead said...

I wouldn't refer to tourism as "one trick pony". Tourism has been the mainstay of the CNMI economy going on three decades now. Tourism, the right kind of tourism, also serves to generally improve communities. We need to focus our efforts properly on tourism, not just continue to go along praying for the hordes of gullible wealthy Japanese to come back.

Saipan Writer said...


Pragmatic, you're right. And you're also right that there doesn't seem to be a link to the initiative anywhere. I have a hard-copy only.

Lil--You're probably right, too. I was talking about the penchant here to find one solution and play it out without regard to other concerns. Tourism is a good industry that we can promote--but as you say, not to scam the tourists with high taxi fares and other unfair practices (and not to encourage them to illegally feed the fish at Managaha).

Votewise '07 said...


The text now is on Google Docs, it would seem: Thanks to for this. You may want to check and make sure it is correct. A copy is available in the Joeten-Kiyu Public Library, according to the Commonwealth Election Commission. It would be nice if you could scan your copy and convert it to PDF. If you email me the PDF, I will make it available from my web site (such as it is).

Pragmatic Plato said...


I have not been able to get confirmation from Kilili that the document that links fromt eh SaipanCasino Blog is correct. I assume it is.

Kilili did state that he will try to have the Full Text Version on the site shortly.

Pragmatic Plato said...

Side Note:

When you read the SCA it makes it appear as though NMDIC is yet to be formed. It was very unclear. I had a feelign that the Corporation already existed.

I called the Registrars Office today and it does exist.

It was incorporated in Dec 2006.

The Incorporators are:

Pedro R Guerroro
Paz Yuniz
Karl T reyes
Herman R Guerroro
Felicidad Ogamuro
David C Sablan
Isdro r Ogarto

I will stopping by tomorrow to pick up all the papers that they have filed (Their articles of incorporation, Bylaws, etc.).

Saipan Writer said...

Thanks for the links and the information. I can try to scan my copy, too, if I have time and send it your way, votewise.

There is an indigenous corporation already formed. I thought it was formed in the late 1990's or early 2000's, and just renewed its registration each year.

The SCA doesn't automatically give the license to this corporation, but it seems most likely that, if the SCA became law, the mayor would appoint commissioners from the SCA supporters who would then accept the bid of the existing corporation. I think its unlikely anyone else would jump through the hoops.

Pragmatic Plato said...


That is not the case. I wish it were so that the Commission could actually choose which Corporation will hold the single license.

The SCA explicitly states that The commission will grant the sole sole license to NMDIC.

Here is the Provision in Article III of the SCA:

"Section 2. Grant of Casino License.

(a) The Commission, upon this Act becoming law, shall issue the casino

license to the Northern Marianas Descent Investment Corporation (NMDIC). The license shall be perpetual. "

NMDIC is a current corporation. The one I have specified in my earlier post.

Pragmatic Plato said...

This law will not only set up a monopoly it actually pens in the name of the corporation that will perpetually hold that monopoly.