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Chile – Enjoy asks SJC to nullify ‘guarantees’ in failed Puerto Varas licence

By - 16 June 2021

Chilean casino operator Enjoy is hoping to avoid having to pay up to $12m in ‘guarantees’ to the Superintendency of Gaming Casinos (SCJ) having failed to relaunch the Puerto Varas Casino with the operating permit it was awarded in 2018.

The operator said: “For reasons strictly unrelated to the company, and which are related to the continuous obstacles, some of them considered illegal, and experienced for almost three years by the Municipal Works Directorate (DOM) of the commune, we have not been able to carry out the project. In the event that the early termination of the administrative process of execution and verification of compliance with the obligations is declared and conditions established in the Gaming Casino Operation Permit for supervening causes beyond the control of Casino de Puerto Varas SA, the collection of the aforementioned guarantees does not correspond.”

Eduardo Sboccia, Public and Regulatory Affairs manager at Enjoy added: “This is a different situation than withdrawing or resigning from the project, as we always had the firm intention of moving forward. The Law establishes that, in order for the authority to collect guarantees, it would have to initiate a sanctioning procedure within which Enjoy can defend itself before the Courts of Justice, and only in the event that a final sentence determines that there was a breach by the operator, could these guarantees be made effective. We believe that the events that occurred in Puerto Varas clearly demonstrate that there has been no breach on the part of Enjoy.”

“In no case have we waived the Operating Permit,” he added. “Since we won the tender in June 2018, we began to develop everything necessary to carry out the works and began the management of municipal permits. However, from the beginning we experienced a series of obstacles and in the end the DOM refused to give us the permits, even when its technical superior – the Housing Seremi – ordered it in writing on two occasions that it had to do so. For reasons absolutely beyond Enjoy’s control, the project became materially impossible to execute within the existing deadlines. They didn’t let us work. That is why the technical request to the SCJ is to recognise the impossibility of execution and to release Enjoy from that responsibility.”

“We have been diligent in our actions, always ensuring transparency and respect for the institutional framework, so that the application of fines or the collection of guarantee bills would not correspond,” he added. “All casino projects require guarantee certificates to ensure compliance with the project and payment of the economic offer. In this case the facts show that there is no breach on the part of Enjoy”.

However, the Santiago Court of Appeals has already stated: “If the project presented can not be executed, or any inconvenience arises that amounts to the fact that the offer made by an operator cannot be developed, and is the responsibility of the latter or not, the The law has resolved that the aforementioned guarantee ballot be made effective, if the breach results in the revocation of the permit.”

Mr. Sboccia continued: “The DOM’s contempt and disobedience to the Housing Seremi is public, notorious and evident, so we always have the possibility of going to the Courts of Justice. For now, we have submitted a complaint to the Office of the Comptroller General of the Republic so that it investigates the facts, carries out a summary procedure and determines the corresponding administrative responsibilities.”

Enjoy has other licences to fulfill in Coquimbo, Viña del Mar and Pucón, which are all under construction and are expected to be operational within the established deadlines.

“In the same vein, we continue with our hotel operation in Puerto Varas, fully committed to our collaborators, and with the economic, labor and tourist reactivation of the commune,” added Mr. Sboccia.

This latest request is currently under review by the regulator. Enjoy has previously asked the authority to use its interpretive powers with ‘the early termination of the operating permits for the gaming casinos of Coquimbo, Viña del Mar, Pucón and Puerto Varas, due to impossibility of compliance.’

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