Imperial Pacific Casino on Saipan Sues Chinese High Roller
Imperial Pacific International, a Hong Kong company which owns the Imperial Pacific (Best Sunshine Live) Casino in the Northern Marianas Islands, is suing a Chinese high roller for $5 million in unpaid casino credit. The high stakes gambler being sued by Imperial Pacific is Yonglun Bao.
The Imperial Pacific Casino is based on the US Overseas Territory of Saipan. Its lawyers, Sean E. Frink and Catherine J. Cachero, filed a lawsuit in the CNMI Superior Court on Rota Island in the Sinapalo jurisdiction in the Northern Mariana Islands.
The casino wants the Superior Court to issue an order to Mr. Bao to pay back his casino credit, plus all interest at 1% per month up to the time the order was issued. Imperial Pacific’s lawyers want the company to take the case to a jury trial, as well.
Yonglun Bao’s Casino Credit Terms
The lawsuit states that the Imperial Pacific Casino and Yonglun Bao reached an agreement on a promissory note. The note extended $20 million of credit to Mr. Bao, but he promised to pay back the credit if he lost the money.
The promissory note said Yonglun Bao was required to pay back the loan, along with an 24% annual interest rate if he did not pay back the loan before the default date. Also in the agreement was the stipulation that Bao would pay the legal fees for any legal action the Imperial Pacific Casino took.
The suit implies Mr. Bao lost more than $5 million, but he refused to pay back the final $5 million. Thus, the lawsuit calls for Yonglun Bao to pay $5 million plus 1% per month ($50,000).
Best Sunshine Live’s Winnings
When the Best Sunshine Live Casino first opened, its reported revenues per year were astounding. Best Sunshine reported over $1 billion in earnings per year — all run out of an abandoned shopping mall. By the time Imperial Pacific built a permanent casino and changed the operation’s name to Imperial Pacific Casino, financial troubles were apparent.
Despite the huge winnings, an inability to get Chinese high rollers to pay their huge bills was the source of the trouble. At a point, the Hong Kong businesswoman who owned Imperial Pacific had to pay $100 million to keep the casino from bankruptcy, despite the supposed $1 billion in winnings. It was clear that a way to get restitution was needed.
How Casino Markers Work
At heart of the dispute is the major difference between Las Vegas-style casino gambling and Macau-style casino gambling. In Las Vegas, casinos extend credit to high rollers who play for $10,000 or more in a gaming session. The casino credit system is called “markers”, a type of IOU players make to a casino.
In Las Vegas, casino markers are treated as a loan — and then some. If a player refuses to pay up, the casino takes the high roller to criminal court. It is not a simple matter of a failure to pay back a credit transaction, but is treated like a form of theft. Nevada casinos get their casino markers paid back.
Why Macau Casinos Don’t Have Markers
Chinese mainland courtrooms do not allow casinos to sue to receive credit. For that reason, Macau does not allow casino markers. Instead, Macau casinos make arrangements with third-party businesses called “junket operators“. The junket operator arranges a trip for a high roller, along with high stakes gambling in private rooms inside Macau casinos.
The junket operator extends loans to the high rollers, then collects on the loans through extrajudicial means. In short, if a gambler refuses to pay a junket operator, then a Chinese triad member collects the debt.
Enforcing Casino Credit in China
At least, that is the way junket operators worked in Macau until the anti-corruption crackdown of mid-2014. When the Beijing authorities began to probe the junket operator industry, the industry’s revenues dried up. It is a big part of the reason Best Sunshine Live Casino was launched, to draw Chinese high rollers who no longer could gamble in Macau.
The problem is, a Chinese high roller Yonglun Bao knows that a Chinese court is not likely to force him to pay back his IOU. While a judge in the Northern Mariana Islands might rule against Bao, Imperial Pacific Casino’s ruling would be unenforceable. In all probability, Bao would have to return to Saipan for the court to be able to enforce its ruling, because Chinese courts are unlikely to enforce the ruling.
Imperial Pacific Sues Bloomberg
This is the second lawsuit Imperial Pacific Casino has filed in the past couple of weeks. The casino sued Bloomberg News, along with a pair of Bloomberg reporters, Matthew Campbell and K. Oanh Ha, for defamation.
Bloomberg has reported numerous times on Imperial Pacific’s operations, including the construction of a permanent casino on Saipan. At issue are reports filed by Bloomberg and its reporters which stated the FBI raided the company’s offices on Saipan. According to Bloomberg, the raid came after a construction accident involving Chinese nationals, who allegedly came to the Saipan illegally.