A ruling by the Chilean Supreme Court has cleared the way for the national regulator, the Superintendencia de Casinos de Juegos, to recommence the tender process for the country’s seven municipal casino licences but a number of major operators are unhappy with the move.
The Chilean Supreme Court has unanimously rejected six protection appeals filed by casino operators Enjoy, Marina del Sol and Inversiones del Sur, to challenge the tender process for the country’s seven municipal casinos. The ruling leaves the way open for the Superintendencia de Casinos de Juegos (SCJ) to restart the bidding process for the municipal licences, seven months after the regulator was ordered to postpone the tender – which had been scheduled to take place on 4 November – by the Santiago Appeals Court.
Once a new deadline for the tender has been established, there should be between 8 and 12 days for operators to deliver their bids, if the licensing process follows the same format.
Investors criticised a number of shortcomings, in addition to a lack of transparency in the tender process in their earlier filing with the Appeals Court. They also argued that the demands on operators were excessive and would make the businesses unprofitable.
“This is a highly litigious industry,” said Vivien Villagrán Acuña, the superintendent of the SCJ, speaking in May. “When I took up my post [in February], I went through the history of all the past casino tenders, looking at how many of them had gone through a process of litigation, and the majority of them had.”
However, her predecessor in the post, Francisco Leiva, has also been critical of the process, contending that there are a “number of illegalities” in the framework for the tender.
“In the case of Arica and Viña del Mar, for example, a date of 1 January 2018 is established for the applicant to begin operations, that is illegal because the law says that applicants are entitled to a period of two years before commencing operations,” he explained, speaking to local media. “Personally, I would have expected the Court of Appeals’ [earlier] ruling to be upheld and that the authorities review the basis for the tender, making the necessary adjustments.”
Responding to the ruling, at the beginning of June, Marina del Sol, presented a further appeal, aiming to overturn the Supreme Court’s decision. It is suggested that other operators, including Inversiones del Sur, which operates a casino in Puerto Natales, are considering their own legal action.
Last year, Marina del Sol – which had previously expressed interest in the licences for Viña del Mar, Coquimbo, Iquique, and Puerto Varas – announced that it would not participate in the licensing process given the current terms.
“We will not participate in any of the seven processes, except by the judicial route or unless someone decides that we must put a stop to this, review it, correct it and give it the necessary time,” said Nicolás Imschenetzky, the firm’s president.
According to estimates released by the SJC, the new tender process could help raise tax revenue generated for the state by the new casinos by as much as 46 percent on average while gross gaming revenue – to be divided equally between the municipality and the state where the casino is located – will increase by 20 percent.
It is thought that new licensing process will see a number of new large scale casinos, given that several of the municipal casino licenses, such as Viña del Mar – where the Enjoy-operated casino generated 13 percent of Chilean GGR in March – are located in the country’s most popular tourist destinations.