On Tuesday, IPI informed investors that it expects to book a net loss for the six months ending June 30 but that this loss would be “not less than 50%” below the US$239.7m in red ink the company reported in H1 2019. So, er, hooray.
Like most casino operators around the world, IPI’s Imperial Palace venue was forced to close in mid-March due to COVID-19. That means IPI welcomed fewer VIP gamblers in H1 2020 than the previous year, and the expected decrease in net losses “is mainly attributable to the reduction in impairment losses” for bad loans made to said VIPs.
Unlike most Asia-Pacific casinos, IPI infamously opted to avoid junket operators in favor of a direct-loan strategy to its VIPs. This was supposed to offer IPI a greater share of VIP gambling losses but ultimately resulted in IPI being unable to collect on those losses, which routinely amounted to hundreds of millions of dollars each year.
Meanwhile, IPI’s ability to reopen its gambling venue now hinges on its ability to pay its bills to the Commonwealth of the Northern Mariana Islands (CNMI) government. IPI failed to pay its annual $15.5m license fee this month, as well as its required contribution to the Community Benefit Fund, prompting the government to warn IPI that its license would be suspended or revoked outright if it couldn’t meet its obligations.
Compounding the problem, the CNMI recently revealed that IPI is more than $9.4m behind in its Business Gross Revenue Tax payments over the past three years. The tax division of the Department of Finance filed a lien on “all the property and rights to property belonging to the taxpayer for the amount of these taxes and any additional penalties, interest, and costs that may accrue.”
IPI has argued that the ongoing shutdown of its only gambling venue should temporarily alleviate it of the responsibility to honor its financial commitments to the local government. But Tuesday saw the Commonwealth Casino Commission (CCC) release a statement saying it had “strengthened its commitment to enforcing compliance by Saipan’s gaming operator with all required local and federal regulations.”
IPI’s outstanding financial obligations grew slightly larger on Monday when a federal judge ordered the company to pay nearly $94k in legal fees to the seven former construction workers who are suing IPI for unfair labor practices. The judge said the penalty was the result of IPI’s “repeated failures to abide by this court’s discovery orders.”
IPI’s other legal woes include an unpaid $5.6m judgment owed to a former contractor and a variety of federal probes involving everything from suspected wire fraud to violations of the Bank Secrecy Act. At this rate, it’s only a matter of time before some senior IPI exec is finally outed as the Zodiac Killer.