Spain – Tenerife Government to sell off three casinosBy Phil - 19 July 2018
The local council (Cabildo) of Tenerife is planning to sell three casinos in September with bidders needing to invest in other tourism related projects, as part of the tender.
The winner will also need to guarantee job security for state employees for a period of two years.
Juan Carlos Perez Frías, Director of the Council Treasury has already held a meeting with union representatives to inform them of what could lay ahead as part of the new process.
Union representatives state that the conditions of the new tender will in all likelihood to be similar as jobs will be guaranteed for two years, and the tender involves significant development in other tourism projects. However, this time tourism investment will only be required in one of the municipalities where the gaming halls are located either in Adeje, Santa Cruz de Tenerife or Puerto de la Cruz.
The public tender will be open for six months and the council will put in place requirements demanding a high level of economic solvency and technical expertise for those companies wishing to take part. Workers will have about 15 days to analyse the clauses related to their situation in the new process, with the aim that they will be able to contribute their opinions.
As before, unions have already expressed their opposition to the proposed sell off. The Worker’s Union of Spain (Spanish: Unión General de Trabajadores (UGT) as well as other unions on the island are strongly against privatisation as they argue that the casinos have consistently reported profits or at least have broken even and they also belong to the state. It would also lead to layoffs.
News that the local council was planning to sell off state casinos on the island first broke in May 2013 when it was revealed that then Tourism Minister for the council Carlos Alonso said that the two largest casinos in Tenerife could be privatised amid claims that they had been exhausting financial resources from government coffers. The casinos in Puerto de la Cruz and Santa Cruz would be sold off after Alonso said he was “in favour of opening the doors to the installation of casino hotels on the island.”
In 2014, the council (now headed by newly elected president Carlos Alonso) announced that it would go ahead with the process starting with the Playa de las Américas casino and would begin to work on the terms and conditions for the new licence. The news caused immediate controversy with union leaders who said that they had been kept in the dark before the official announcement was made and there had been inadequate time for sufficient debate on the issue.
In September, it was revealed that despite three operators having reportedly expressed their interest, no one had come forward to buy Playa de Las Americas casino. With the submission date passing with no formal bids lodged, the Council opted to look into the reasons why no offer was made before re launching the tender process.
While the local council is seeking to open up the market and place the industry out of state hands it has in the past received considerable push back from opposing lawmakers and union leaders who insist that the government is creating a false picture of their economic outlook so that they will show a decline in profits and will highlight the case for privatisation as a result.
According to council statistics, combined the casinos owe around €15m. However, the UGT has alleged that many seemingly unrelated public works have been charged to the state owned Casino Company, which is one of the reasons why it reported losses of €3m in 2013 alone. Indeed according to the UGT the claim made by the council that the casinos put state coffers finances at risk was based on a “biased” study that was not supported by any technical data.
The most popular casino in Tenerife is The Casino Playa de Las Americas, which is located on the Costa Adeje – an up-market resort on the southern coast. Meanwhile the Puerto de la Cruz Casino is located in Tenerife’s main tourist resort in the north of the island and The Casino Santa Cruz is located in the landmark 5-star Iberostar Grand Hotel Mencey in Santa Cruz.