Imperial Pacific want to build a casino complex on the tropical island paradise of Saipan but will their grandiose plans amount to anything?
The Northern Mariana Islands sit in a gentle scattered curve that matches the run of the famed Trench of the same name that comprises some of the deepest parts of the world’s oceans, itself just to their east in the western half of the Pacific Ocean. The three islands are Aguijan, Tinian and Saipan, with that second one being perhaps the most famous having long since earned its place in the history books.
In 1945 it was Tinian’s “North Field” collection of airstrips that was home to the 509th Composite Group that flew B-29s against targets in mainland Japan during the closing stages of World War Two and became famous for the missions in which the atomic bombs Fat Man and Little Boy were dropped on the cities of Hiroshima and Nagasaki bringing the conflict in the Pacific to a swift and timely end.
Problems For Casino Construction In Paradise
Over 7 billion USD to be invested in Saipan Casino
Imperial Pacific International propose 1,600 gaming tables
Industry reaction skeptical at best
Earlier in the war US Marines had stormed the larger of the three islands, Saipan, in what became one of the costliest battles of the war with some 20,000 Japanese civilians dying during the fighting including 1,000 who jumped from cliffs rather than be taken prisoners. Of the 30,000 Japanese defenders, only 921 survived. The strategic importance of the island was clear to both sides, as the later use by the US demonstrated.
This dominance of the island continued long after the war with the local economy significantly propped up by US military spending even to this day, however tourism has long been important to the island of Saipan and gambling news of the tropical paradise’s remote location would be a selling point they attracted a fair few people until the fiscal crisis which stopped some carriers flying to the islands and placed the economy in some difficulty.
Tourism Needs Boosting
The malaise in visitor numbers has made the island even more dependent upon financial aid from the US who still view the islands as strategically valuable given their salient location and growing influence of China in the region, which also includes the ever troublesome North Korea. Indeed in recent years there has been a slight build up in US forces in the area, and Saipan has seen an increase in the number of servicemen visiting on “R&R” trips.
In order to redress this worsening situation the authorities are considering numerous plans and projects to attract more tourist cash to their economy, a notable example of this being their agreement to allow a major casino complex to be developed and constructed on the island. This has angered some locals and confused gaming analysts who took to the internet betting in the US that investors would find it difficult to make viable.
Imperial Pacific International, says it will be investing a total of US$7.1 billion in the island constructing the first large scale casino resort. This figure is already double the amount initially voiced and the 25 year license the company was issued with came with the option to extend for a further 15 but even this, some fear, will not be enough to make it pay off as an investment, and indeed some question the entire project.
Part of their suspicion is based on that figure which seems overly high given casino budgets in say Macau or Singapore barely top out at half that amount, and even the big spenders like the casino owner and US gambling laws lobbyist Sheldon Adelson only go above that figure in exceptional circumstances (like the possible legalization of gambling in Japan that he’s already pledged would trigger a US$10 billion investment from the US gambling king).
Disproportionate Investment Plan?
The scathing reaction of the industry to this plan to construct 4,200 hotel rooms with some 1,600 gaming tables comes despite Imperial Pacific International having the backing of one of Macau’s largest junket operators, the Hengsheng Group, and promising US$20 million upon the start of construction with another amount of the same value a year later, and also a community chest of US$10 million to be distributed to locals.
However is the background to those numbers the causes some industry watchers concerns as to the validity of the entire plan. The financing of the project is due to come through equity or debt but as yet they’ve not yet raised more than HK$220 million (a drop in the ocean) and “has not yet formulated a concrete fund-raising plan”. Which is odd given they’re intending to begin construction of the first hotel early next year.
The sheer scale of the project breeds skepticism “Imperial will,” said one knowledgeable industry commentator in response to the plan, “get their junket room that they can fly VIPs to, the government gets money so they can pay their people the back-wages that they owe, but they’re not going to invest US$7.1 billion. They’re going to say ‘Oh, the situation has changed….’ and it will drag on for 20 or 25 years.”
These junket trips from mainland China are a lucrative business that many countries in the region have attempted to snaffle away from Macau and Hong Kong, but with a five hour flight between Saipan and its potential Chinese customers, and the rise of online casinos in the US and elsewhere, it could be just a little too far for many to bother with. “Some of Macau’s most successful junket operators were approached but nobody said yes to it so far.” Which could doom the project to a lengthy stalled future.