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Chile – Trouble ahead for Chile’s municipal tender process

By - 31 May 2016

Chilean company Marina del Sol has raised serious objections to the Chilean Gaming Board’s (SJC) upcoming bidding process for the seven municipal casino licences.

The operator claims that gross revenue estimates and visitor numbers issued by the SJC as part of the tender process are misleading. In a legal appeal the company has raised questions over the background information provided by the municipal governments as well as by the current operators of the municipal casinos. In its written statement the company claims that the figures “prevent all participants from the process of accessing information that enables equal opportunities.” In extensive detail the statement analyses gross income figures released by the municipal government and the operator of the the casino located in Viña del Mar.

According to local newspaper El Mercurio, the report claims that while the municipal government claims that the casino receives a total of 814,000 visitors a year the operators reported a few months later that it stood more closely to 1.5m – almost double. In addition the reported average spends is very low compared to the rest of the industry while there are also inconsistencies when it comes to gross gaming revenue figures. Combined these figures puts the entire process in doubt and makes it “impossible to compete” on an equal footing while the lack of information “creates huge confusion” for those who must compete with the current operator.

The company also pointed out a number of other inconsistencies which they say could be incompatible with local gaming laws specifically regarding special conditions which apply to each one of the seven licences. According to the document, a number of these conditions were not approved by the Resolution Council of the SJC the only body permitted to set them out.

Interest has been growing in investing in the municipal casinos especially the casino located in Viña del Mar. In May Head of the SJC Daniel García told local press that now that the Chilean Gaming Control Board (SJC) has published the requirements for the upcoming tender process one American, three Latin American and a Chinese company could apply for a licence for the municipal casino licence. Viña del Mar is undoubtedly the most emblematic of all the municipal licences. The minimum financial bid for the casino will be US$22.3m.

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