The Island of Saipan is struggling to rebuild after Super Typhoon Yutu in part because the Imperial Pacific Casino is struggling. Imperial Pacific Casino, formely known as Best Sunshine Live, is the island’s only legal casino.

Typhoon Yutu struck Saipan on the morning of October 25, 2018 and the hurricane destroyed over 3,000 homes. The 180 mph winds made Super-Typhoon Yutu the most powerful tropical cyclone of 2018.

Despite Saipan being a US overseas territory, the world media and especially the US media paid almost no attention to the Saipan recovery effort. More than 6 months later, Reuters reports that nearly a thousand children attend school in a tent.

A slow response from the US federal government is only part of the story. The slow earnings of Imperial Pacific Casino is a big part of the reason recovery has stalled.

About Imperial Pacific Casino

Hong Kong-based Imperial Pacific Holdings opened Best Sunshine Live casino in 2014. The operation catered to Chinese high rollers, who faced a crackdown on Macau junket operators.

At the time, Saipan seemed like the perfect jurisdiction for a casino, because it follows US laws. Saipan is a US overseas territory in the mid-Pacific Ocean. The United States seized the island from the Japanese in World War II, and continue to own several Marianas Islands.

The original casino occupied an abandoned shopping mall, but reported billions of dollars in revenues. The owners planned a big casino-resort on the island and receive major tax breaks to build the resort.

Despite the tax breaks, Imperial Pacific Casino (renamed in 2016) generated big tax revenues for Saipan. The government soon depended on the casino revenues, because it drew so many Chinese high rollers.

Casino Markers in Saipan

One problem persisted, though: the Chinese high rollers did not always pay their casino markers. “Markers” are a form of casino credit that acts like an IOU. High rollers who play for $10,000 or more a session and have good credit receive the option to sign markers.

Issuing markers avoids the need to bring huge stacks of cash into the casino. In the United States, casino markers act as a way to draw high rollers. Originally, only Las Vegas casinos offered casino credit, but the practice spread across the United States over the years.

United States Casino Credit

In recent years, even smaller commercial casinos in the American heartland have lobbied for legal markers. Missouri casinos, for instance, lobbied to have the right to issue markers. Their argument was it would lure high rollers who otherwise wouldn’t use Missouri casinos.

The problem with Imperial Pacific Casino markers is they catered to Chinese high rollers. Macau casinos never issued markers, because they could not take mainland high rollers to mainland courts to collect debts. Without the ability to collect the casino debts, they simply refused to issue credit.

Macau Junket Operators

Instead, a system of junket operators sprung up. Junket operators planned trips to Macau for high rollers. Once there, junkets would host private games in the big resort casinos, then issue players their own credit. Junket operators paid casinos a fee to rent their space, then collected huge profits from the VIPs.

“Collected” is the operative term. Junket operators couldn’t sue debtors who didn’t pay, either. Instead, they use Chinese organized crime members to collect debts in extralegal ways. The triads collected debts, and the triads became associated with the junket operators.

That proved to be a huge problem in 2014 when Xi Jinping’s corruption crackdown came to Macau. Suddenly, Chinese high rollers stopped using the junket operators (at such a pace). Imperial Pacific Casino existed to cater to the VIPs who stopped going to Macau.

10 Chinese VIPs Ruin Imperial Pacific’s Plans

Without a history of paying casino markers, though, about 30% of the Chinese VIPs who played on Saipan refused to pay back Imperial Pacific. The casino couldn’t sue in Chinese courts for debt relief. It also didn’t have access to triad enforcers, so Imperial Pacific had no way to collect debts if VIPs didn’t pay using the honor system.

Imperial Pacific Casino wrote off more than $624 million in 2018, which more than accounted for the $413.5 million loss the casine reported in 2018. What’s more, most of the $624 million was owed by only 10 Chinese high rollers.

$624 Million in Written-Off Casino Credit

The $600 million loss might not be a one-time occurrence. Another $1.2 billion is still outstanding to VIPs who took out casino credit. Imperial Pacific says most of that debt is recoverable, but half of the $1.2 billion figure has been outstanding in a year’s time.

It might be miraculous that 70% of the casino’s VIP debt was paid back. It’s also astounding that 10 bad actors have ruined the business plans for a casino, or the hurricane recovery plan of a whole island.

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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