Imperial Pacific Faces License Suspension, Controversial Company Owes Island Millions

Posted on: March 5, 2021, 06:42h. 

Last updated on: July 19, 2021, 01:29h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Officials in Saipan are finally losing patience with Imperial Pacific (IPI). The Chinese company has, for the past five years, been building the impossibly lavish Imperial Palace Casino in the US territory in the western Pacific Ocean.

imperial pacific
Imperial Pacific’s Imperial Palace on Saipan has been dogged by controversy since day one and has now run out of money, according to its lawyer. (Image: Imperial Pacific Inc.)

Executive director of the Commonwealth Casino Commission Andrew Yeom on Tuesday asked commissioners to suspend the company’s exclusive license. It is accused of a catalog of violations of its licensing agreement and for its failure to comply with the commission’s orders.

Infractions include IPI’s failure to pay a $3.1 million annual regulatory fee, a $15.5 million annual casino license fee, and contributing $20 million each year to a community benefit fund. IPI has also ignored CCC’s efforts to force the company to settle its debts with vendors.

Despite never before having built or operated a casino, IPI won the bid for a single Saipan gaming license in November 2014 after promising to make these fixed payments to the cash-strapped island. Unusually, it is not required to pay any tax on revenues.

Briefly Highest-Grossing Casino on Earth

In 2017, a temporary casino, ostensibly set up in a shopping mall to train dealers while the main property was being built, was generating $2 billion per month in revenues. Thanks to a stream of Chinese high rollers flown in by IPI’s former junket-operator owners, mother and son Cui Lijie and Ji Xiaobo, it was for a short time the highest-grossing casino in the world.

But the cash flow has long since dried up, with IPI admitting that it has been forced to write off hundreds of millions in unrecoverable VIP debt.

In February, an attorney for IPI told a federal court that the company did not have sufficient funds to make settlement payments to the US Department of Labor.

The department secured a $3,360,000 consent judgment against IPI in 2019 for violations of the Fair Labor Standards Act after it found IPI contractors owed workers millions in back wages and damages.

In March 2017, a construction worker died after falling from a scaffold on the casino construction site, prompting an FBI investigation. This led agents to uncover widespread visa violations among the workers, who had been brought to Saipan from China. Two contractors were ultimately charged with importing and harboring illegal aliens.

In 2019, seven construction workers sued IPI and its contractors alleging forced labor and human trafficking.

Hidden Human Cost?

In a 2018 article titled, Bloomberg discovered from hospital staff on the island that so many laborers had been injured during the construction of the casino that the hospital kept an unofficial spreadsheet.

It read like “a grim catalog of broken bones, lacerations, puncture wounds, dislocated limbs, and eyes penetrated by flying metal,” according to Bloomberg.??

IPI later sued Bloomberg for alleging in the same article it had paid the island’s governor Ralph Torres and his family millions of dollars in kickbacks.

Torres is currently the subject of an ongoing FBI corruption investigation.