CNMI proposal to legalize online gambling “another desperate attempt”: Ben Lee
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According to recent reports, lawmakers in CNMI are pushing for a new revenue stream, looking to online gaming.
This comes as the multi-billion-dollar Imperial Pacific International (IPI) casino-resort operator faces calls for dissolution, with investors and creditors coming calling. The operator currently holds a monopoly for casino gaming on the island.
But the new bid for alternative income could bring more woes than benefits, as other jurisdictions, such as the Philippines, have already encountered.
“The Philippines POGOs (Philippine Offshore Gaming Operators) as well as Cambodia’s Sihanoukville’s descent into unmitigated regulatory and policing disasters both appear to hold no lessons for the CNMI,” notes Lee.
The Philippines endures an ongoing spat over the worth of offshore online gaming operation (POGOs), after multiple crackdowns, raids and charges linked to human trafficking and money laundering.
Meanwhile, Sihanoukville shut down its online gaming operations entirely after operators, mainly linked to China, set up shop and conducted operations that ran them abreast of authorities.
The CNMI, Saipan inclusive, still falls under United States jurisdiction, with increased scrutiny over activities such as gambling.
Lee notes that “the CNMI […] remains subject to certain US Federal Laws”, however it is “unclear and untested if the CNMI falls outside the grasp of the Federal Wires Act”.
The expert questions “even if it does, will the CNMI government have sufficient resources to ensure that its online operators do not transgress the boundaries?”
The overreach by some online operators has put the Philippines in the spotlight recently, calling for reapplication of POGO licenses and increased oversight of the sector.
And looking at their missteps, Lee outlines a possible way forward for CNMI.
“To have a truly credible online gaming industry, the CNMI will have to put in place the proper IT and legal resources to monitor and regulate the operators. Only then can they incubate a transparent and sustainable industry”.
One of the primary roadblocks for Saipan is their focus on Chinese clientele. Early within their operations, IPI published monthly rolling chip values that topped even those of Macau – the biggest casino hub in the world.
Now, the operators must shift focus, notes Lee, pointing out that “the Philippine justified their POGOs by denying that they targeted China and all the other countries that have outlawed online gaming by their nationals within their borders.”
Looking to mitigate this problem: “ring fencing would have been the solution but was never truly enforced nor was there any real auditing of the POGO servers and revenues”.
This has led to particular oversight of the regulatory body in the Philippines, PAGCOR, and calls for the elimination of POGOs altogether, citing a lack of taxation payments and malfeasance.
While online gaming is prevalent in many countries, Asian operators have taken a relaxed or highly stringent approach, with little wiggle room in the more regulated vicinities.
Given its track record of oversight on casinos and video poker clubs, it will be interesting to see how CNMI aims to approach online gaming legislation and how strict (or lax) it may be.
