Doubts raised over US$7.1b plan for Imperial Pacific's Saipan casino
Imperial Pacific plans to build a large resort on a remote Pacific island, but analysts are concerned about its chances for success
Gaming industry analysts are questioning the viability of a US$7.1 billion investment by Imperial Pacific International to build the first large-scale casino resort on Saipan.
In August, the Hong Kong-listed firm was granted a 25-year licence to build and operate a casino on Saipan, the largest island of the Northern Mariana Islands, with an option to extend for a further 15 years. The following month it more than doubled its original budget for the complex to US$7.1 billion with plans for more than 4,200 hotel rooms and 1,600 gaming tables.
In comparison, Las Vegas Sands tycoon Sheldon Adelson said in February he would be willing to invest US$10 billion in Japan should the country proceed with plans to legalise casinos. Budgets for casinos in Macau or Singapore are typically US$3 billion to US$4 billion.
"Imperial will get their junket room that they can fly VIPs to," an industry source said. "The government gets money so they can pay their people the back-wages that they owe. But they're not going to invest US$7.1 billion."
"They're going to say 'Oh, the situation has changed'… and it will drag on for 20 or 25 years."
The casino deal would provide a steady source of income for the Saipan government. Imperial Pacific agreed to pay an annual licence fee of US$15 million, adjustable for inflation.
The company, backed by Hengsheng Group, one of Macau's largest junket operators, also agreed to create a community chest with an initial contribution of US$10 million to be distributed to locals.