Casino Operator Enjoy Wins Battle Against Chile’s Gaming Regulator

Posted on: April 18, 2022, 10:01h. 

Last updated on: April 18, 2022, 12:04h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Enjoy is enjoying a moment of satisfaction as it continues to battle Chile’s gaming regulator. A court has sided with the casino operator, giving it more leeway to complete its Puerto Varas Casino.

Puerto Varas Casino
The sign outside Chile’s Puerto Varas Casino could use a little work. The casino’s operator is battling Chile’s gaming regulator over the property. (Image: BioBioChile)

The legal battle continues between casino operator Enjoy and the Superintendency of Casinos (SCJ, for its Spanish acronym) over the development of the Puerto Varas Casino. However, the last two decisions announced by the courts have been in favor of Enjoy, a good sign that could save the operator over $12 million.

The SCJ revoked the license following alleged noncompliance by the operator. Enjoy had assumed the obligation to build the approved comprehensive casino project within two years, possibly extending it for another year. That agreement ended on August 1, 2021.

After the SCJ revoked the license, Enjoy filed a request to temporarily stop the project and a lawsuit against the SCJ. It alleges that the Directorate of Municipal Works of Puerto Varas engaged in “arbitrary and illicit” behavior that prevented the construction and timely execution of the works.

Court of Appeals Agrees

The Court of Appeals agreed with the operator. It ruled that, absent a precedent case, it would grant the suspension request. Then, the SCJ sent a report that assured that Enjoy’s request sought only to delay the process. It asked the court to declare that the order only covered the license suspension and not the legal dispute.

The court’s last decision was to reject the request of the SCJ. It reiterated that the courts granted the suspension on the same terms it was requested. In other words, the order paralyzes the entire process until a final judgment is issued in the ongoing dispute.

In 2005, the Municipality of Puerto Varas tendered the operation of a casino in the city, awarding a bid of approximately 1.2 billion Chilean pesos (US$1.46 million). That concession, in theory, remained in place for 10 years.

The concession expired on December 31, 2015. From that moment, a new bidding process began. Instead of Puerto Varas controlling the concession, the SCJ led the process for the first time.

In 2018, Enjoy received a new concession for 15 years. The agreement included a stipulation that the casino begin operating in June 2020 with new amenities and expanded services.

However, as Enjoy claims, local politics are preventing it from moving forward. The Puerto Varas Municipal Works Directorate refuses to approve the construction plans, arguing that they don’t conform to construction standards.

Major Impact on Employment

Some lawmakers believe workers should receive compensation for whether the casino is operational through the concession language. Chilean Deputy Daniel Lilayu asserts that if the concession is valid for 15 years, employees need to be paid for 15 years.

The repeated extensions have left workers without compensation. Some already completed more than 20 years of service, losing years of work seniority. The casino previously employed 400 workers.

Lilayu now wants the government to get involved and recently requested that the Chamber of Deputies intervene. He wants oversight of the SCJ, with the regulator providing updates on the progress of the resolution, as well as potential employee compensation.

Lilayu also feels that the government of Puerto Varas might need some oversight. He is requesting the local government provide a report on what is doing to find a solution and explain why it didn’t do more to safeguard employees’ income.