Chilean Gaming Regulator Evaluating New Casino License Bids
Superintendencia de Casinos de Juego (SJC), the Chilean gaming regulator, announced a meeting to analyze a new contract bid on a land-based casino in the central city of Pucon. In all, 7 casino licenses are receiving new bids by gaming operators and developers, after the Chilean Supreme Court ordered such a process to happen.
SJC’s Vivien Villagran Acuna said of the Pucon casino bid, “We have deadlines that the law envisages in a very precise way: the first one that expires is with respect to the Pucon casino and that is what we are working on.”
“We have a meeting with the Deciding Council basically to generate the final proposal for the technical evaluation of the bids.”
The contract review process is part of a highly contentious re-bidding process which has taken years to play out. The original licenses were handed to casino companies in 2005.
Chilean Supreme Court Appeals
The Chilean Supreme Court rejected the original casino contracts produced by the 2005 licensing process. That meant that commercial casino operators had to tender new bids to the SJC.
Viviean Villagran Acuna said the lawsuits and appeals process were expected by her agency, which sometimes is translated as ‘Deciding Council of the Chilean Gaming Board’.
Acuna said in May, “This is a highly litigious industry. 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.”
New Bidding Process
Evaluations of the new bids is what is taking place at the moment. Chile’s major casino companies were not happy with the Supreme Court decision. Casino operators Marina del Sol, Enjoy, and Inversiones del Sur filed appeals to the Supreme Court’s decision, but those appeals were rejected by the country’s highest court.
Besides the Pucon casino proposal, G3Newswire reported that the SJC plans to rule on casino proposals for 6 different cities in Chile. The cities of cities of Puerto Natales, Puerto Varas, Iquique, Vina Del Mar, Coquimbo, and Arica all have casino proposals before the Superintendencia de Casinos de Juego. SJC plans to have a decision by the end of the month on all proposals, so major announcements should be forthcoming.
Technical Evaluation of Bids
Vivien Villagran Acuna said her agency plans to do a “technical evaluation” of the various bids before analyzing the financial aspects of the applications. Acuna told G3Newswire, “We have a meeting with the deciding council basically to generate the final proposal for the technical evaluation of the bids. Once that happens and it is validated by the council.”
“[SJC plans to] generate a resolution that indicates exactly what the scores are. That resolution [will be] published and the opening of economic bids called.”
At present, 11 commercial casinos exist in Chile. Seven state-run casinos also exist in the country. For March 2018, the commercial casinos generated a total of $48.75 million, which represents a 0.9% decline from year-to-year. The state-run casinos generated a combined $20.69 million.
Francisco Leiva Criticizes Court of Appeals
Francisco Leiva, who was Acuna’s predecessor at the SJC, has been critical of the process. Leiva said of the Supreme Court decision, “In the case of Arica and Vina 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.”
“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.”
Marina del Sol Rejects Licensing Process
Nicolas Imschenetzky, the president of Marina del Sol, said his company would not take part in the licensing process. Imschenetzky said late in 2017, “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.”
Marina del Sol’s executive seems to believe that the re-licensing process is an excuse to gouge business owners for more and bigger payments.
Gross Gaming Revenues to Increase 20%?
The SJC said the new bidding process should raise significant reveneus for the national and local governments. SJC estimated that revenues could increase as much as 46%, because the casino licenses tend to be located in Chile’s population centers.
Acuna believes the gross gaming revenues could increase 20%. Whatever the case, the city and the state plan to split the proceeds 50/50.