The fate of Imperial Pacific International (IPI) and its continued presence in Saipan hangs in the balance. If the Commonwealth of Northern Mariana Islands (CNMI) is concerned about the possibility of not finding someone to take the embattled casino operator’s place, those concerns can now be put to rest. Should casino regulators part ways with IPI and its Imperial Palace casino, there are plenty of interested parties lined up to immediately fill the void.
IPI Facing Possible Exit from Saipan
IPI has had a troubled history with Saipan and the CNMI since it first began working on the Imperial Palace casino resort. Things have never gotten any better and, as a federal judge orders asset forfeitures to cover mounting debts, the casino operator could be on its way out. The Commonwealth Casino Commission (CCC) decided to feel out the casino industry to see if there was any interest from others to step in, and it has found that finding a replacement wouldn’t be an issue.
The CCC can’t be concerned that losing IPI would mean a loss of revenue, as the operator hasn’t paid its license fees and other obligations in years. Still, CCC Executive Director Andrew Yeom told the House Gaming Committee yesterday that other operators have shown interest in coming to Saipan if IPI has its license revoked. When asked if the interest could be considered legitimate, Yeom replied affirmatively, but added that he cannot provide specifics due to the sensitive nature of the ongoing discussions. He asserted, “I can comfortably tell you that there are bidders out there, whether legit or not. Yes, there are some legit ones. And I’ll stop at that.”
Imperial Palace Needs Polishing, or TNT
Imperial Palace is, now, a diamond in the rough. IPI promised CNMI legislators and gaming commissioners the moon in exchange for the rights to offer an expanded gaming property, but it has not been able to fulfill any of its goals. A continued lack of fund and ongoing lawsuits are exacerbating the situation, compounded by the casino’s closure since last year because of COVID-19, and it doesn’t appear that any relief is on the horizon. As a result, and after repeatedly showing that it cannot comply with rules and regulations, IPI is at risk of permanently losing its casino license, which has already been suspended.
Should IPI be shown the door, one alternative would be for the CNMI to do nothing. Yeom said during the hearing that the Legislature will have to decide what route to take, adding, “Whether you want to just kill the industry altogether, that’s up to you.” However, the smart thing to do would be to seize all of IPI’s assets in order to settle its debt, and then issue a new license to a more competent entity that knows how to run a multimillion-dollar casino resort.
Representative Vicente Camacho isn’t so sure that this would be the best option. He’s not convinced that a new operator would want to take on a massive task like Imperial Palace and has his own idea of what should happen to the property. He commented in the hearing, “There’s just no solution for that building. …I don’t know if anybody wants to buy that building, it would be too expensive to fix it up. I think we should just kill it, and then we dynamite it” and turn it into a memorial for ancient burials.
Star Entertainment Shies Away from Crown Resorts Takeover
Star Entertainment is no longer entertaining the idea of a Crown Resorts takeover. On paper dubbed a merger, any action by Star to integrate Crown’s operations into its own would have put the latter’s brass on notice that their days were numbered. However, seeing that Crown continues to face more scrutiny across Australia and may lose another gaming license in the country, Star has decided that it is better, for now, to step away and let the saga play out before making a move.
Star Steps Away From Crown Merger
Star began talking to Crown brass a couple of months ago about a potential merger after Oaktree Capital Group and the Blackstone Group showed interest. At the time, Star was willing to open the wallet and do almost anything necessary to consummate the marriage of Australia’s two largest hospitality companies. However, it has had a change of heart, explaining that “issues raised at Victoria’s Royal Commission into Crown Melbourne have the potential to materially impact the value of Crown, including whether it retains the license to operate its Melbourne casino or the conditions under which its license is retained.” In simple terms, and without having expressly stated it as a reason, the potential loss of a license in Victoria would lower Crown’s value, which means Star could offer a deal for a lot less money. Crown has already lost its status in New South Wales (NSW) as a viable casino operator.
According to Peter Cohen, the former CEO and Executive Commissioner of Victoria’s state gaming regulator, things aren’t looking good for Crown in Victoria. Speaking with Inside Asian Gaming, he indicated that it isn’t very likely that the embattled company will stay alive in the Australian state, asserting that there is only a 33% chance that it will retain its license. He added that, if it does continue, it will be with “some conditions” put in place. He added, “Regulators generally work on the idea of trying to get a person’s attention – you start lower and increase to get their attention. If the Bergin inquiry is their second chance, I think we found out from the Royal Commission that Crown didn’t really get the message.”
Additional Trouble Ahead for Crown
Not only is Crown having problems in NSW and Victoria, but the state of Western Australia (WA) is scrutinizing the company, as well. There, however, things are a little more complicated, as the state can’t even keep its gaming regulatory body in proper shape. The Perth Casino Royal Commission (PCRC), according to Australian media outlet ABC, won’t be able to count on much support from the Gaming and Wagering Commission (GWC) as it investigates Crown’s ability to continue with a license for the operator’s Crown Perth resort, because the GWC is now on its third chief casino officer in five months.
The PCRC is scheduled to meet again next week to discuss Crown and Crown Perth, but the GWC hasn’t been able to compile the data and documents that have been requested amid the continuous executive departures. However, given Crown’s track record in NSW and Victoria, there isn’t much reason to believe its operational integrity in WA is any more solid. This might make it easier for WA to move forward with its decision, despite not having all the documents in order.