Tinian casino investor says regulator spent fee before probe began

Tinian Entertainment Chairman Wilfred Lam has written to the island’s Mayor Joey Patrick San Nicolas, expressing concern over $100,000 in investigation fees the company paid to the casino regulator, saying the money was spent long before any probe began.

TEC, a unit of Hong Kong’s China Strategic Holdings, is seeking to take over the license to operate the troubled Tinian Dynasty Hotel. It is embroiled in a war of words with the commission, which it claims is dragging its feet over the licensing process.

The company has warned the casino is running out of cash and will be forced to close if the license is not issued soon, with the loss of a significant number of jobs on the island, which forms part of the Commonwealth of Northern Mariana Islands.

Lam has asked the Tinian Casino Gaming Control Commission (TCGCC) to show good faith and issue an interim license before it pays further fees. However, the regulator has hit back, saying the delays have been due to changes in applicants and delays in making necessary fee payments. It has also urged politicians to step out of the regulatory process.

“CSHL [Chinese Strategic Holdings Limited] submitted its application in January 2015 as a corporate qualifier but did not complete submission until February 2015 when it paid the requested initial fee deposit of $100,000,” according to TCGCC executive director Lucy Blanco-Maratita.

Maratita said it was only in March 2015 that TEC came into the picture when it applied for a new casino license but did not pay its non-refundable casino license application fee, so did not officially become a casino license applicant until July 2015.

She explained that TCGCC is bound by regulations in its expenditure of fees paid relating to the processing of casino license applications. This includes investigation fees.

According to regulations, TCGCC “shall cause all actual costs associated with investigation, hearing and licensing of each casino license application, as determined necessary by the Commission, to be paid from licensing cost deposits submitted by the affected applicant.”

Further, if the Commission determines that actual costs of processing a casino license application will exceed the licensing cost deposit, the applicant will be notified to submit an additional deposit in an amount to be determined by the Commission based on an estimate of the amount of investigation and other expenses remaining.

“Such notification shall establish a date by which the additional deposit amount is to be remitted which allows a reasonable time of not less than fifteen days in which to comply,” the regulations state.

Prior to or following the issuance of license, the regulations state that if a licensee or applicant proposes a change to the ownership, capitalization or organizational structure of the licensee or applicant which, pursuant to the Act and in the sole judgment of the Commission, requires that additional investigation be undertaken, the Commission will notify the applicant of an amount and due date for remittance of a licensing cost deposit based on the estimated cost of additional investigation and other expenses…”

The TCGCC said it has had to deal with several entities claiming to lease the Tinian Dynasty casino-hotel complex.

It began engaging with CSHL in early 2014.

Then subsequent filings in the Hong Kong Stock Exchange revealed several other entities involved in the proposed lease of the Dynasty from Hong Kong Entertainment (Overseas) Investments Ltd.

Blanco-Maratita said, “We have expended many hours working with the applicants on their quest to invest in the gaming industry here on Tinian. And we continue to do so.”

It was earlier revealed that Chinese Strategic Holdings Limited, Mega Stars Overseas Limited, Gain Millenia, and Well Target were attempting to acquire Dynasty and operate the casino operations.

Meanwhile the disagreement between the elected leaders of Tinian and the TCGCC continues as the closure of the Tinian Dynasty looms.

San Nicolas reiterated his commitment to the island –with the people whose livelihoods are adversely impacted by the casino’s closure.

TCGCC Chairman Matthew Masga, in a statement said, the TCGCC understands the realities facing Tinian due to the Dynasty’s decision to close the casino and to close the property this month.  “The Commission sympathizes and understands the loss of jobs and the downturn in the economy as we also have families and are affected. We are looking at every possible solution that does not compromise the job of the Commission, does not compromise integrity.  But, it does not help that the Delegation continues its ‘bullying stance’ against the Commission,” he said.

He once again voiced their desire to be left alone in the performance of their duties in fulfillment of their mandate under the Tinian Gaming Act.