Chile – Investigation into possible collusion between operatorsBy James - 17 August 2022
Chile’s National Competition Authority (FNE) revealed that it has carried out a series of raids involving directors of casino operators in Chile. The agency is believed to be carrying out an investigation over possible collusion within the industry.
During the raid, computers, cell phones and documents were taken, which are now in the hands of the FNE team, led by lawyer Juan Correa.
The authorities raided the properties for evidence, although they did not provide further information after requests were put forward by the companies involved.
Last week on Thursday (11 August), Enjoy’s shares fell 4.9 per cent to 2.23, “positioning itself as the title with the worst performance in the local market,” according to Diario Financiero.
Operator Marina Del Sol was also targeted. The company strongly refuted any allegations of wrongdoing. President of Marina del Sol, Nicolás Imschenetzky said:
“I don’t understand what we can have to do with this, especially since what they are questioning is collusion in bidding, and we were the only company that generated applications outside of its current operations. So, for us it’s strange. In my case, there is confusion. We spend money, time, effort to raise bids in other cities, we manage to do it and despite that we are branded as bad. I can categorically rule out the participation of myself and our company.”
Enjoy also expressed its “absolute conviction of having always acted in accordance with the applicable regulations, including those related to free competition . . . the investigation will conclude that the conduct of the company and its main executives has always been in accordance with the law and the highest standards of business ethics,” the company said.
Dreams also denied that it had nothing to do with practises that threaten free competition through a statement and made themselves available to the corresponding authorities.
Meanwhile The Chilean Association of Gaming Casinos (ACCJ) in a statement defended its members saying that no collusion had taken place
“Aware of the investigation, this association will lend its full collaboration to the authorities, in order to clarify any doubts regarding its actions,” it said adding that casino operators “respect deeply the Chilean legal framework and carry out their work in strict adherence to the law”.
Bid-rigging is considered to be one of the most serious crimes within the system of free competition laws updated in 2016 and could even have a criminal penalty of up to 10 years in prison.
The investigation is running parallel to the FNE’s investigation into the merger between Enjoy and Dreams. In June the FNE said that in order to investigate its effects on the market that it would need a further 90 days to investigate and analyze the merger. The FNE said that the investigation had begun on May 3 2022 after initially finding that the merger could possibly reduce competition in the market and have a negative effect on consumers as well as other casino operators.
In January Enjoy S.A and Dreams S.A – the two largest casino operators in Chile – announced that they had finalised their agreement to merge the two companies. In a presentation to shareholders the firm highlighted that the merged company -which will be called “Dreams Enjoy SA,”- would consolidate itself as a leader in the casino industry in Latin America.