Divi Casino Faces Two Week Closure and Fines

DIVI Carina Bay Resort and Casino (File photo)
Divi Carina Bay Resort and Casino (File photo)

The V.I. Casino Control Commission imposed sanctions on the owners and operators of Divi Resort on Tuesday after they missed several deadlines to reopen rooms despite opening the casino, contrary to license restrictions. The penalties include closing the casino for two weeks this month and fines.

In addition to mandating the casino close between Nov. 15 and Nov. 29, the respondents will pay $500 per day until they comply with license requirements, which include completing hotel repairs. Virgin Islands casino licenses are contingent on operating hotels, restaurants and banquet facilities in addition to a gaming establishment.

At a hearing in October, the Division of Gaming Enforcement and the two Casino Commission commissioners discussed whether the license should be suspended or revoked, because the hotel and casino had not complied with a temporary license to complete repairs and renovations of hotel rooms and villas that were supposed to have opened in May 2020.

Before the meeting, attorneys for the companies that own and operate Divi – Treasure Bay and Grapetree Shores – sent a letter to the Casino Commission arguing a show cause order in July was improper and asking that it be vacated. The letter added that there had not been enough time for hotel and casino management to prepare for the hearing and they would not attend.

At the October hearing, R. Oliver David, assistant attorney general and acting director of Gaming Enforcement reported to commissioners Usie Richards and Stacy Bourne that he had visited Divi twice and spoke with both general managers.

“Based on what I saw there was a lot of work to be done,” David said, making it clear the hotel was not ready to open.

At the end of the hearing, Richards said the matter would be studied further and acted upon within a few days. He said the casino and hotel owners had not responded to the commission’s request to show cause why they shouldn’t be fined or otherwise penalized.

Tuesday’s decision denied the hotel and casino’s request to reconsider the show cause order because the respondents didn’t demonstrate there were any errors committed by the commission in executing the order, Richards said.

Just after the October meeting, the Source corresponded with Susan Varnes, president and chief operating officer for Treasure Bay, who said the company has kept the commission up to date with progress at the hotel. She said she thought the meeting would be postponed due to short notice. She was in Mississippi, dealing with the incoming Hurricane Delta that was headed for the corporation’s largest property in Biloxi. Additionally, she said she and her associates were unable to get COVID-19 testing in time to travel.

Richards, the acting Casino Control Commission director, countered that the meeting was scheduled earlier in the year and the corporations should have expected it was coming up soon.

Treasure Bay and Grapetree Shores have been struggling to rebuild after the 2017 hurricanes damaged the casino and hotel. The casino was not affected as badly as the hotel, which lost rooms, restaurants, the lobby area and some of its villas. It has been necessary to replace all of the room plumbing, the electrical on the ground floor and 60 percent of the framing and drywall, according to Varnes.

Hotel management spoke of delays in supplies and difficulties maintaining a dependable workforce at Casino Control Commission hearings over the last two years. The largest changes of scope were discovered at the end of 2019, during construction, Varnes wrote.

In December 2017, the commission granted a temporary casino license, and have extended it since then, stipulating the casino cannot reopen without repairs completed. With a renewed license in August 2018, the casino reopened in September, although the stipulation of renovation and repair appears to have remained part of the license.

According to an email from Varnes on Wednesday, the casino was allowed to reopen in September 2018 by the Casino Control Commission while the rooms were under construction.

“This construction exception is the same position the commission took when Caravelle opened in April 2016 without the required 75 rooms and 400-person banquet facility,” Varnes wrote.

Updates sent to the commission said the owners anticipated opening the resort in December 2019, and then April 2020 and then November 2020.

The temporary license issued in October 2019, which was set to expire in May 2020, again authorized opening the casino once documents had been received and accepted by the commission. It also stipulated all renovations would need to be completed in the east and west wings of the hotel and the villas by May 2020.

Receiving no recent updates from the resort and casino, according to a motion by the commissioners, the commission asked Gaming Enforcement to investigate Divi for compliance. David visited twice, spoke with the general managers and found that the resort needed more work.

Notice of Tuesday’s decision and penalties were delivered to Treasure Bay and Grapetree Shores on Tuesday afternoon, according to Richards and Varnes.

“We will vigorously defend our rights and reputation, including an immediate appeal and motion to stay the CCC’s orders. At stake is the livelihood of 110 casino employees who have been through a year of closure after Hurricane Maria and months of closure during the pandemic,” Varnes said.