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Uruguay – Uruguay’s tender for casino in Punta del Este on hold

By - 10 February 2020

The tender for the new casino licence in Punta del Este has been postponed. The representatives of Fosara S.A. (Cipriani group) were ready in the Ministry of Tourism of Uruguay to open offers for the management of the new casino that will form part of the new Cipriani Ocean Resort & Club Residences complex in Punta del Este.

However representatives of Baluma S.A. the owners of the hotel and Casino Enjoy, (formerly known as the Conrad) lodged a last minute appeal to suspend the tender, according to the Undersecretary of Tourism, Benjamin Liberoff.

Under local laws it is possible to present an appeal suspending a process without the need to develop arguments justifying the appeal, the official explained to the Observer newspaper. As a result the exact reasoning behind the move is yet to be clarified.

However once the appeal is resolved, if a “lack of foundation or reckless malice” is proven, sanctions may apply according to local laws.

The initial date for the opening of offers was January 20 but was postponed at the suggestion of the Administration Division of Material Resources and General Services of the Ministry of Tourism due to the “number of inquiries received”, according to the resolution.

The opening of the new casino is subject to the construction, completion and operation of a luxury hotel. The emblematic San Rafael hotel in Punta del Este, has been closed since 2011, but was acquired by the Cipriani Group for more than US$40m in February 2018 after an agreement was signed by Giuseppe Cipriani
Representatives of Enjoy issued a brief statement saying that the legal move had been made with the purpose of “safeguarding their rights” when it comes to the contract between Baluma SA and the state.

The current regulations establish that licenses for casinos establishments must be granted by a public tender. According to local law the only other private casino in the popular tourist destination is allowed, if an investment equal to or greater than that of the former Conrad hotel casino is made.
As a result the clause that exists in favour of Baluma S.A is being taken into account in the tender. In the terms and conditions rules state that the amount to be invested in the construction of the new luxury hotel must be equal to or greater than US$160m, without taking into account the value of the land of the infrastructure for the new facility.

In addition, as compensation, the bidder must commit to pay the state an annual fee made up of a percentage of the casino’s gross income and a minimum annual amount. The minimum annual amount payable will be US$7.8m in the first year, with annual increases of US$100,000 until 2026. After that date the annual amount will be fixed after the bidder has proposed its economic package but it must be equivalent to or greater than US$8.4m. The casino license will be valid for 20 years.

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