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Uruguay – Hotel Enjoy de Punta del Este signs deal with Uruguayan Government

By - 8 May 2018

The legal representatives of the firm Baluma – the company which owns the Hotel Enjoy de Punta del Este casino have signed a new licence agreement with the Minister of Economy and Finance of Uruguay, Danilo Astori. The new agreement covers the payment of taxes for the casino (formerly known as the Conrad) finally ending a petition which had first been submitted to the government several years ago.

The modification of the contract was made possible thanks to a resolution by President Tabaré Vázquez made on April 9, which enabled the negotiations between both parties to modify the fee payable by the company.

According to Uruguayan daily El País both parties agreed to change clause 2 of the contract signed in May 2012. Baluma’s proposal regarding the 2nd clause of the contract dates back to August 20, 2013 when the company asked the government to redefine the concept of “gross income” when it came to tables, slot machines and poker in order to deduce the amount payable. These concepts included non-negotiable promotions or tokens, loans or credits made to gamblers as well as player discounts. Baluma SA, when presenting the petition, used as an example the rules in force in the State of Nevada of the United States “because they are the same as those recognised worldwide.”

According to the terms of the new contract, the expression gross income is now interpreted as “the difference between gains and losses of games of chance, minus promotions strictly related to gambling before the deduction of expenses has been made.” However, the new deal does not include the loans, which have not been collected from players as well as discounts made in order to collect debts when establishing the gross income of the casino.

Before signing the new contract the company paid the Ministry of Economy US$1,847,855 corresponding to the 2013-2017 financial years as they had taken into account debts which had not been collected from players. This payment enabled both parties to move forward and sign the contract.

In 2012, an annual fee equivalent to 6.5 per cent of gross income was put in place with a minimum fee payable. That year Baluma paid a fee of US$6.5m. Between 2013 and 2017, an annual minimum fee of US$7m was put in place which increased by US$ 100,000 per year. As of 2017, the annual fee was equivalent to 7 per cent of gross income with a minimum of US$7.3m payable.

In the years to come the fee will increase by US$100,000 every year. Between 2027 and 2037 the fee will stand at 7.75 per cent of gross income with the minimum fee stipulated at US$8m. Since 2012, Baluma SA has paid a total of US$107m to the Uruguayan State.

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