Inside Asian Gaming

inside asian gaming December 2015 12 opening in 2011. Saipan voters twice rejected casinos in referendums. Nevertheless, CNMI’s legislature legalized Saipan casinos in March 2014. Imperial Pacific subsidiary Best Sunshine International, then led by former Genting Singapore General Counsel Terence Tay, moved to secure the license, which requires development of an integrated resort with a minimum $2 billion investment and 2,000 guest rooms. Even with an annual license fee of $15 million in lieu of gaming taxes, the lofty investment requirement appeared designed to dampen interest. Mega Stars, the Hong Kong-based owner of Tinian’s casino also applied, leading to a spirited competition. Best Sunshine promised a $3 billion resort and a $30 million community development fund, including $10 million in direct payments to Saipan citizens, and won the license. Even though it had the only hand left in the game, Best Sunshine raised the ante again in September last year, issuing a $7.1 billion, five phase development plan encompassing 4,252 hotel rooms, 300 villas, 1,600 gaming tables and 3,500 slot machines at two sites, a town hotel and a beach resort. To replace Mr Tay, who left shortly after the license was granted, Imperial Pacific hired Mark Brown, former president of Sands China and most recently chief operating officer for NagaWorld in Cambodia, who was tasked with scaling up junket operations. As Best Sunshine’s president and CEO, Mr Brown secured a 59,000 square meter site for the town hotel that will have 50 rooms, 300 tables and 500 machines in its initial phase. Construction began in July, due for completion late next year. To prepare gaming floor personnel, CNMI allowed Best Sunshine to open a training casino in July, 16 months ahead of the projected hotel opening date, in a shopping mall that caters to tourists. Dubbed Best Sunshine Live, the temporary casino with capacity for about 40 tables and 100-plus machines, added VIP operations early last month, held its grand opening on November 27 and expects to “commence collaboration with junket operators” this month, according to Imperial Pacific’s filing with the Hong Kong stock exchange. (In October, Imperial Pacific dropped its profit share agreement with Hengsheng, tied to a HK$400 million convertible loan, but company ownership remains linked to the junket.) Imperial Pacific continues to search for a site for its larger resort project. CNMI’s Department of Public Lands last month issued a Request For Proposals on a 1.61 million square meter (398 acre) site currently occupied by Mariana Resort and Spa, whose lease expires April 30, 2018. Mr Brown says Best Sunshine “will be as heavily involved as we possibly can be” in pursuit of the site. “We are here on the island and we have proven the type of business and type of neighbor that we are, so we are not going to sit back and watch someone else go in for the RFP,” Mr Brown told local media. Mariana Resort’s owner Kan Pacific, Saipan’s largest remaining Japanese hotelier, dating to CNMI’s 1980s heyday as a getaway for Japan’s middle class, has mounted a legal and grassroots campaign to extend its lease. Kan Pacific lawyers charge the RFP violates lease terms. Hundreds attended a public rally in support of lease extension. “We expect robust competition for a parcel of this magnitude,” Public Lands Secretary Pete Tenorio wrote in a letter to the Saipan Tribune newspaper. “If Kan Pacific makes the best proposal, we welcome them to continue to operate Mariana Resort. If not, we welcome the bidder who proposes the highest and best use for the entire premises that will generate the most income for the collective owners of public lands.” In South Korea, Imperial Pacific participated in the first round of competition for two new licenses for foreigner-only casinos. It was one of four groups proposing an integrated resort near the previously approved Caesars Entertainment/Lippo IR site in Midan City on Incheon’s Yeongjong Island. Imperial Pacific didn’t indicate whether it joined the final proposal phase that was scheduled to close late last month. However, Seoul based KORE Policy and Management Consulting General Manager Tim Lee says that, days ahead of the deadline, Imperial Pacific was one of just two groups that made the $50 million deposit required to submit a proposal. Independent activist investor and US corporate director Michael Levin, who has worked in Korea, thinks it’s possible Imperial Pacific’s October decision to drop its profit share agreement with Hengsheng, tied to a HK$400 million convertible loan, divorcing it from the junket’s operations, could be helpful to win licensing approval from Korean regulators, even though Imperial Pacific’s ownership remains linked to Hengsheng. FIRST STEP Suncity’s first move into casino ownership was announced in March, as a partner with Chow Tai Fook Enterprises and VinaCapital in central Vietnam’s Quang Nam province. Genting Group and VinaCapital originally planned to develop an IR on the site, known as Hoi An South, but Genting, a 20% partner, pulled out in 2011. Chow Tai Fook, which owns 10% of STDM and is part of the Destination Cover Story “In South Korea, Imperial Pacific participated in the first round of competition for two new licenses for foreigner-only casinos. It was one of four groups proposing an integrated resort near the previously approved Caesars Entertainment/Lippo IR site in Midan City on Incheon’s Yeongjong Island.”