In this regard, latercera.com has published; On June 2, the general manager of Marina del Sol, Juan Ignacio Ugarte, sent a letter to the Superintendency of Casinos (SCJ), requesting access to some type of mobility pass so that its professionals can visit land and cities to work offers economic for places that are attractive.

He also asked for some kind of facility so that his Canadian partners could enter Chile under the same process. "It is not possible that this superintendency can access your request, since the request is outside its powers," the authority would respond 13 days later.
On May 24, and after being suspended for 270 days, the SCJ resumed the process of granting twelve licenses that expire between 2023 and 2024. Although the dates and deadlines established by the regulations pressured its resumption, in the industry there are no different opinions: all accuse that the process is colored by a myriad of aspects that augur a bad or weak result. The date of delivery of the economic offers is set for October 18.

"The situation faced by the gaming casino industry in the bidding process is complex and disappointing, because unfortunately the superintendent Vivien Villagrán has not given the basic guarantees to carry out a transparent and competitive process," says the president of the Association of Casinos, Ricardo Abdala. And he adds: “Since last year we have been warning that the authority is imposing on the operators a tender model that is not attached to the current legal framework and that, in addition, has been unsuccessful, as evidenced by the events seen in the last time. However, we have not been listened to, nor have we seen an interest in dialogue on the part of the regulator. On the contrary, we have been pushed to participate in a process that is based on a bidding model that has shown that it does not work ”. If 64 local and foreign companies competed for 17 places in the 2005 tender, in 2015 only Enjoy and Dreams ran.

From the Superintendency the vision is different. “The law considers giving the necessary time for new operating permits to be granted or for the current ones to be renewed, also counting with the time necessary for the projects to be installed, without generating a vacancy between the expiration of the permits. in operation and the start-up of new casinos in the event that new operating companies are awarded it ”, says the SCJ.

A long-standing problem
In 2005, Law No. 19,995 was enacted; Under these regulations, 17 casinos were established throughout the country. The objective of the law was to provide the communes with tourist infrastructure. The sector invested US $ 1,500 million.

According to the operators, at that time renewal mechanisms were established that, in general terms, practically allowed an automatic renewal of operating permits after 15 years. It was suggested that it would be the permit holders who would activate the renewal request between 210 and 240 days before expiration and that, of the 2,000 points needed to be awarded the permit, the incumbents already started with 1,550, an almost uncounterable advantage.

“Large investments were made, thinking in a term of 30 years; this is how they talked with the banks, ”says an operator.

In 2015 the regulations were modified and the regulation between the casinos under the supervision of the SCJ and the municipal permits was standardized. With this, they all came under the Superintendency. A technical offer was established where the projects had to obtain 60% of the points to qualify for the next stage, and an additional economic offer to the original tax: the highest amount was awarded in the tender.

In the sector they insist that this regulation recognized the right of those who had obtained their permits in 2005. In the same law a paragraph was established that stipulated that “operating permits granted prior to the modification of this law shall be governed by the norms in force at the time of its granting, unless the later norms imply better conditions for its operation ”.
The interpretation of the Superintendency is very different, which led to it activating this bidding process and mandating the operators to participate from scratch. “The SCJ applies the law. Given the divergent opinion of some industry players, various Courts of Appeals of the country have ratified the actions of this body in seven cases to date, establishing that the Superintendency has not incurred in any illegality, nor infringement of regulations or applicable provisions on the matter, limiting itself, on the contrary, to fully comply with the current law, ”says the SCJ.

The judicial path

Today, there are twelve places up for bidding. Of these, four are from Dreams (Sun Monticello, Temuco, Valdivia and Punta Arenas), three from Marina (Talcahuano, Osorno and Calama), two from Enjoy (Antofagasta and Los Angeles), in addition to Antay Casino & Hotel de Copiapó, from the Spaniards from Luckia, the Casino de Colchagua, from the Cardoen group, and the Gran Casino de Talca, from the Peruvian company Corporación Meier.
Dreams and Marina are in court today. Dreams filed an appeal with the Court of Appeals that was rejected. He then appealed to the Supreme Court, via appeal, and to the Constitutional Court to challenge the option not to appeal, and reverse the initial ruling.
Marina del Sol, meanwhile, filed four appeals of illegality, arguing that the process was bad. All are in analysis in court. “Just for participating we are forced to accept the rules and we have all the lawsuits running since the government opened the tender, because we could not sue him for something that we did not know was going to happen; there are the demands presented, but not the answers and there is not much time ”, they need close to the firm.
From the SCJ they insist on their point. They maintain, for example, that on May 10 the Santiago Appeals Court rejected the claims of illegality presented by two operating companies. Among other grounds, the judgment indicates that “the appellant must abide by the regulations currently in force, not by the one to which it illegally aspires, called the beauty contest, as the Superintendency told her, the entity that is responsible for defining the rules of the respective process, in accordance with the interpretation that corresponds to it, as provided by law, of the pertinent legislation "and that" if the legislator had wanted to deliver the first license to operate casinos for 30 years, he would have said so in the expresses ”.
“There is a pending dispute that must be resolved. Which is another reason not to carry out a tender now, ”says an industry player.

In December 2018, the General Manager of Enjoy at the time, Gerardo Cood; that of Marina, Juan Ignacio Ugarte, and that of Dreams, Jaime Wilhelm, met with the Undersecretary of Finance, Francisco Moreno, to analyze the problem, but it came to nothing. At the end of last year a table was created between the sector and Moreno. They raised the obligation to respect the 2005 regulations and kept moving forward. Days later, the superintendent gave an interview to Diario Financiero defending the new conditions. And the table broke.

But the problem does not end there. Casinos have been closed for almost 17 months due to the Covid-19 pandemic. In the industry they argue that economic offers are built and proposed on the basis of expected profitability. And to estimate it, factors such as income in recent years, the number of visits, among other projections, must be studied. "There have been no visits, there has been no income, not even the slightest job and market stability that would allow any serious projection to be made," says an operator.

They also underline the impossibility of visiting the places, together with the null option of foreigners being able to visit the squares so that the process is open to international actors. The president of Marina, Nicolás Imschenetzky, acknowledges that thanks to the fact that he has a construction company, he has been able to visit places, because they do not give passes because of a casino company.

All this, in instances where banks are also not open to supporting such a financially complicated industry. "Under these conditions, the State cannot pretend to receive good economic proposals, and for this reason the purpose of the law is frustrated," say industry sources.

If the process moves forward, there are already voices that point to the ICSID instance for compensation. "They would participate in the process, and if it is not won, the 15 years remaining to recover the investment would be charged at the ICSID", they point out in the industry. In fact, operators have already contacted lawyers to see that exit.

Today, they know that if the process goes ahead they will have to participate - "We cannot let that investment thrown away," they say, however, they hope that the process will be suspended. In the SCJ they are clear about a new extension: "With the current legal framework it is not possible."