Tenerife’s publicly-owned casinos were put up for sale for EUR24.9m last year, yet the decision continues to draw criticism from the Spanish General Worker’s Union, which contends the properties have been undervalued.
The Council of Tenerife’s efforts to sell the island’s three state-owned casinos continue to generate controversy as one of Spain’s largest unions has renewed calls for the tender to be suspended.
The sale of the casinos represented the culmination of a council vote back in March 2012 which approved the regional government’s Plan for the Restructuring and Streamlining of the Public Enterprise Sector.
The tender for Casino Playa de las Americas, Casino Santa Cruz de Tenerife, and Casino Puerto de la Cruz represents the “process of restructuring the island’s public sector”, according to Carlos Alonso Rodríguez, president of the Council of Tenerife.
Nevertheless, the Spanish General Worker’s Union (UGT) has strongly criticised the sale plans and is in the process of undertaking administrative proceedings in a bid to halt the tender.
After scrutinising the tender terms, the UGT released a statement alleging that the sale “clearly damages the principles of objectivity and transparency that must govern any public tender”.
A key point of contention has been the asking price for the properties. “[The Council] previously put one of the casinos up for sale for EUR20m and now they’re selling three for EUR24m,” stated Agustín Melián, president of the works council of Casinos Tenerife, a move he argues is all the more incongruous given that at present the properties are the most profitable they have been in a decade.
According to figures from the Council, since 2014 – the first year the bushiness made a profit since the 2008 financial crises – the properties’ EBITDA has continued to grow, reaching EUR2.9m in 2018.
Reflecting this, Melián stated “it is not normal that every time they earn more money, instead of going up, the price goes down”.
The union also contends that an assessment carried out by property valuations company Tinsa, which valued Casino Playa de las Américas at EUR4.5m, does not include the value of the venue’s slot machines and gaming equipment.
Despite this, Alonso asserts that the sale is justified. “It does not seem reasonable that gaming is in public hands, it’s an anomaly in Spain. There is not a single other publicly-owned casino in Spain,” he stated.
The tender specifications require the new operator to retain all 121 members of staff currently employed by the three properties for a period of at least two years.
However the UGT has also cast doubt on this. “We know that they can use the cost of the investment to justify any losses and to do an ERE,” Melián added. “This was put to [Juan Carlos] Pérez Frías (head of the council’s Treasury department) but there hasn’t been a response.”
In Spanish legislation, an ERE (expediente de regulación de empleo) is a downsizing plan, allowing a company experiencing an economic downturn to request authorisation to temporarily suspend or permanently terminate employees.
The majority of the principal political parties on the island, including the Canarian Coalition (CC), the Spanish Socialist Workers’ Party (PSOE), and the People’s Party (PP) are in favour of the sale, however left-wing Podemos opposes it.
Speaking last year, the spokesperson for the PP, Sebastián Ledesma, praised the insular government’s decision to divest itself of the properties. “The Council has to move away from publicly owned businesses. The decision is the correct one. We should let the market freely regulate itself,” he explained.
PSOE councillor, Miguel Ángel Pérez, acknowledged that the government had guaranteed the job security of the casinos’ employees as part of the sale conditions. “They should have realised this divestiture a long time ago,” he added.
In late November, the government reported that four companies – Global Casino Technology Corporation, Pama e Hijos, Olympic Entertainment Group, and Automáticos Canarias- Grupo Orenes – had applied to participate in the tender.
The proposal to privatise the island’s casinos was first unveiled in May 2013, while Alonso Rodríguez was serving as Tourism Minister.
The council moved forward with these plans in 2014, holding a licence tender for Casino Playa de Las Americas.
However, the property failed to attract any bidders, while the sale drew criticism from both opposition councillors and union officials.
