Argentina – Final stage of Buenos Aires tender brings mixed results for governmentBy Phil - 24 January 2019
The last leg of the tender to operate 3860 slots in seven casinos in the province of Buenos Aires ended yesterday. However the economic proposals put forward by one operator was far less than expected meaning that the process could be delayed.
The seven casinos have been tendered in three lots, which combine the most and least profitable rooms, so that there are offers for all of the casinos.
In the first stage, Boldt was the only company to put forward a bid for the Trilenium Casino, in Tigre, which was tendered in the same lot as the Casino de Pinamar. Boldt submitted an offer in which the provincial government keeps 47 per cent of the net profits of the slots (after paying prizes).
In the second lot which includes the casinos of Tandil, Miramar and the Hermitage in Mar del Plata, Bingo Oasis de Pilar only offered to pay 28.4 per cent of profits falling well below expectations.
The third lot which includes the Mar del Plata Central Casino and the Monte Hermoso Casino, Casino de Victoria SA offered 44.5 per cent of any future profits to the province.
Currently, the province receives 50 per cent of the net winnings. However in practice the government is left with 30 per cent as it must pay staff salaries as casinos, unlike bingo halls, are state-owned, as well as services and other operating expenses. A large part of these expenses will now be covered by the winning bidder, and the government hoped to increase its revenues by receiving offers of over 30 per cent and 40 per cent of net profits. However the offer put forward by Bingo Oasis de Pilar fell well below what the government had hoped for. In addition there could have been a better deal on the table for the government as Boldt was not permitted to reveal the economic offer it had had submitted for lots two and three.
According to local daily La Nación the Provincial Institute of Lottery and Casinos (IPLyC) will analyse the economic offers in full next week and will certainly seek to negotiate an improved offer from Bingo Oasis de Pilar. If it does not obtain it, it has not ruled out declaring that part of the tender void.
In January the IPLyC decided to exclude local gaming company Boldt from the licensing process for two of the three lots. The decision was made after state prosecutor, Hernán Gómez, questioned the guarantees put forward by the company during the tender for the casinos and ordered that two of the offers put forward remain unopened.
The news meant that Boldt’s offer had already been rejected for over half of the businesses the company has run for over two decades. Boldt had seemed likely to retain its position as market leader in the province as in October the IPLyC announced that Boldt was emerging as firm favourites to obtain the new licences after the first stage, which included the technical bid evaluation, financial background checks as well as other aspects for a maximum possible score of 55 points.