[bsa_pro_ad_space id=1 link=same] [bsa_pro_ad_space id=2]

Skip to Content

Operator News

Chile – Sun Dreams disputes two municipal licence awards in court

By - 3 August 2018

Sun Dreams has now filed two appeals before the Santiago Appeals Court against the Chilean Gaming Board (SJC) through which it seeks to challenge and revert the decision to grant the licence to the casinos of Pucón and Puerto Varas to rival Enjoy.

Sun Dreams argue that the resolutions of the SCJ are illegal. According to the company, Enjoy presented two projects with incorrect technical criteria, which allowed the company to reduce the costs associated with both projects. This, they argue, allowed the company to put forward greater profit forecasts but went against the rules of the tender and other regulations. This is significant as once the technical bid evaluation was completed then the winning bidder was awarded to the company offering the highest financial bid.

In both documents submitted to court, Sun Dreams argues: “The awarded bidder has submitted a project with lower associated costs, which allowed it to present an economic offer of greater value than that offered by this party, which ultimately determined the decision of the contest in its favour. This is because the economic offer is the determining factor . . . for the granting of a casino operating permit.”

According to the licensing process, technical bids were received from each of the applicants and the SJC verified that they contained each of the relevant documents as set out in the technical bid evaluation guidelines.

Once the evaluation was completed and the scores awarded, the SJC dictated a resolution indicating the final scores for each of the applicants and called a hearing for the financial stage of the bidding process. In this public hearing, a representative of the Deciding Council opened the envelopes that contained the financial offers of those applicants who had passed the minimum score established by law. This score had to be at least 600 points out of a total of 1,000 in order to go forward. The licence was then awarded to the operator that submitted the highest financial offer.

In the case of Pucón, Sun Dreams argues that Enjoy did not meet the minimum requirements for a 4-star hotel. The company also argues that there are problems relating to car parking for the proposed site while for the casino in Puerto Varas, the company says that there are logistical problems meaning that the project cannot be developed in the terms presented in the tender. In addition, the company alleges that the real amount of work needed for the fusion of the new casino to the already existing hotel could be greater than that proposed in the tender.

In June, the Deciding Council of the Chilean Gaming Board (SJC) awarded five municipal casino licences with Enjoy scooping four licences and Sun dreams the other. In July, Enjoy informed investors that it plans to invest as much as US$116.7m over the next two to three years in the municipal casinos of Viña del Mar, Pucón, Coquimbo and Puerto Varas. In the case of Pucón, Enjoy plans to invest US$31m over a period of three years. Of this amount, 66 per cent will be used to update slot machines on the premises and integrate the casino into the hotel. The remaining 34 per cent will be used to remodel the hotel, so that it reaches the “four star” category. Meanwhile for the licence in Puerto Varas the company expects to invest US$24.5m. Of this amount, 48 per cent will be used on new slot machines and 52 per cent will be used for the integration of the new casino and the remodelling of the hotel in Puerto Varas. This will include a new pool and terrace, as well as new spaces allocated to dining.

Share via
Copy link