Commonwealth of the Northern Marianas
Gambling On Their Future
Poker Machines Test Islands’ Values
"Poker machines" are big business in the Commonwealth of the Northern Mariana Islands. The ubiquitous electronic gambling devices, which are legal, can be found on every island and in every village. They are usually lined up against a wall or in row after row, in so-called poker parlors, usually converted homes that now serve as neighborhood gaming centers.
The business is so big that it is now the commonwealth's second leading source of tax revenue, this year bringing in $36.6 million in fees and business gross receipt tax collected. The business gross receipt tax still leads with a little over $57 million.
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In fact, the poker industry has replaced the garment manufacturing as the second leading tax source, as user fees from the contracting garment industry fell this year by over $5 million to $25 million as compared to more than $30 million last year, according to Finance Secretary Fermin Atalig in a recent interview with Pacific Magazine.
But if the poker machine industry is giving the embattled commonwealth a badly needed injection of tax revenue, it is causing a host of social issues that some say far outweighs any financial benefits. There are over 1,600 poker machines throughout the commonwealth, with the number of machines on Saipan outnumbering the islands of Rota and Tinian combined. Tinian is the only Northern Marianas island where casino gambling is legal.
The Saipan Chamber of Commerce (SCC) earlier this year attempted to put on the November ballot an initiative to restrict poker arcades along Saipan's major roads away from the villages, schools, churches, stores and laundromats. The effort failed by just over 200 votes. The signature drive started late and instructions were confusing, resulting in non-residents and non-voters signing the petition.
The chamber hasn't given up. It promises to launch a new drive next year to put the restriction on the ballot for delegates to the commonwealth's Constitution Convention. That is, if the Senate doesn't pass a bill offered by Rep. Claudio "Clyde" Norita to place restrictions on the poker parlors along major roads, something Governor Juan N. Babauta proposed. Norita's bill had already cleared the lower house.
In fact, if it were up to Babauta, the poker industry would be banned. He believes the social ills caused by the gaming machines far outweigh economic benefits, according to Press Secretary Peter Callaghan. "But the governor is also a realist and he knows the poker parlors are not going to go away overnight so he is willing to compromise," Callaghan adds.
Alex A. Sablan, the Saipan Chamber president, says the group's intent is not to kill the poker industry. However, it wants more stringent controls placed on the business. Sablan says the original intent of poker machines when it was introduced on Saipan in the early 1980s was to restrict them to major hotels for tourist entertainment. It later spilled out of the island's hotels and into practically every village on the island.
Poker machine operators pay $12,000 annually in fees per machine on Saipan, while Tinian and Rota businesses pay $2,500 per machine. Half of the poker fees collected in each of the three islands is deposited into the general fund while the other half is set aside for appropriations by each island's respective congressional delegations. Finance Secretary Atalig says it's easy for critics to call for banning poker machines. "But because of the positive economic impact of the poker industry," he says, "it should be done on a gradual manner. That decision rests with the Legislature."
Joseph K.P. Villagomez, director of the Saipan Community Guidance Center, says poker addicts outnumber alcohol and drug addicts combine. During the past two years, an average of five to 10 persons per month were being referred to his office by the courts for treatment. He currently treats 48 patients.
Villagomez believes the number barely scratches the surface as poker addiction, unlike alcohol and drugs have no symptoms. "The social consequences in this community because of poker addiction are very deep-rooted in the destruction of family and the destruction of the individual itself," he says. The poor economic condition the Northern Marianas is in is driving more people into poker establishments. They play in hopes of winning a jackpot to pay off their debts, Villagomez says. But the odds are heavily against them, and almost all end up losing, he adds.
One person who knows all too well the destructive consequences of gaming machines and he banned slot machines from Saipan in 1975. At the time, Francisco C. Ada was the District Administrator of the Northern Marianas, the group's chief executive when the islands' were a part of the U.S.-administered Trust Territory of the Pacific Islands. Enacted by a municipal ordinance, slot machines were allowed into Saipan in the early 1970s and placed in major hotels and a few large business establishments. Slot machines started as "social diversions" from other forms of gambling tolerated such as cockfighting and bingo.
'The worst thing that happened is like what's happening now (with poker machines) when they get into the villages," Ada says. "It's so tempting because our people have never been exposed to these kinds of easy money, so to speak. Little did they know they would dig deep into their pockets to play."
The result, Ada recalls, was an increase in domestic violence, theft and robbery cases. Following a Trust Territory government Cabinet meeting one morning, he informed then High Commissioner Edward E. Johnston of his plans to ban slot machines. "It's your district," replied Johnston. "If anybody can do that kind of thing, it's you so I'll leave it up to you, young man."
Ada, who was also the commonwealth's first lieutenant governor in the late 1970s, says he consulted with a cross section of the community before issuing his executive order. Many were in support, including top political leaders who were privately backing his plan. To prepare slot machine owners, Ada issued his emergency district order on May 1974 to be effective after midnight January 1, 1975.
Shortly thereafter, he began receiving death threats to him and his family. Ada says he knew personally those who threatened to kill him. The Saipan Municipal Council and the Marianas District Legislature passed bills to extend the life of slot machines one more year. Declining to name names, Ada says several people offered him bribes to change his mind, but he held his ground.
"But the same people who threatened my life came back six months after I banned slot machines thanking me for saving their money, their marriage and property," Ada recalls.
