Chile's regulatory body starts process to revoke Puerto Varas Enjoy Casino's permit

The Superintendency of Gaming Casinos (SCJ for its initials in Spanish) announced through a statement that it will initiate an administrative procedure to revoke the permit granted in June 2018 to the Enjoy Casino of Puerto Varas, due to the fact that the operating company did not comply with the "development and fulfillment of the agreed construction works within the established period of time", which expired on August 1, and they also highlighted that this delay "was verified by personnel of the SCJ on the ground".

The Casino Act indicates that, once the aforementioned term has expired without compliance with the corresponding activities, the operating permit will be understood to be revoked according to the administrative procedure regulated in the same law.

In this context, the SCJ will initiate the aforementioned administrative revocation procedure, in which it seeks to "safeguard the interests of the treasury and particularly of the municipality of Puerto Varas". Only once this procedure is executed, the collection of the guarantee fees will be carried out, which must be kept in force at all times by the operating company.

Notwithstanding the above, it is important to emphasize that according to the Casino Law and Circular Law No. 84 of the SCJ of 2017, the current concessionaire of the Municipal Casino of Puerto Varas may continue to operate until the new operator of the casino that must be tendered, is operational.

The Enjoy Group pointed out that the responsibility for these delays lies with the Municipal Public Works Department. "The Superintendency knows that all efforts were made to timely comply with the execution of the project in Puerto Varas, but that, nevertheless, Enjoy was affected by unquestionable situations of fortuitous event or force majeure, recognized by the Comptroller's Office and by the Supreme Court", Enjoy said about the procedure that the SCJ will initiate.

The operating company explained, in addition to the impact of the coronavirus pandemic, the "illegal actions of the building control body, in contempt of its technical superior the Ministry of Housing and Urban Planning of the X Region, simply refused to grant building permission, without which it is impossible to build in Chile."

"So serious and arbitrary was the disobedience of the  Municipal Public Works Department that in addition to excessively extending procedures, and openly violating the urban planning and construction regulations, it even neglected the repeated requirements made by the Superintendency of Casinos, so in the end, the facts are being investigated in the Comptroller's Office to determine responsibilities and sanctions," the group said.

The casino firm ratified its commitment to comply with its obligations and said that it will take all actions to demonstrate that it is not responsible in this situation and that, therefore, the application of sanctions is not applicable.

"Enjoy regrets that the improper conduct of a communal authority affects the normal operation of the industry dependent on the Superintendency of Casinos and that this conduct has deprived Puerto Varas of a project that would have generated significant benefits for the commune and its inhabitants," the group concluded.

The casino operator Enjoy, which is in the process of changing its shareholding structure, after a financial reorganization process, reported in June that it asked the SCJ to declare the end of the administrative procedure for the execution of its obligations derived from the Operating Permit of the Puerto Varas Casino.

According to what the group said at the time, the Municipal Public Works Department of the area refused to give them the permits" in open contempt to what was ordered on two occasions by the Regional Secretariat of the Ministry of Housing and Urban Development of the Los Lagos Region."

Enjoy filed a complaint and petition for an administrative summary against the  Municipal Public Works Department, and "the application of the corresponding sanctioning measures to the Office of the Comptroller General of the Republic," the company said.

The Ministry of Housing of the region ensured that they will not sit idly by. "We are currently preparing the administrative records to request the Comptroller's Office to open a summary against the director  Municipal Public Works Department of Puerto Varas, which will be dispatched within the next few days," they said in June this year.