Three leading gambling operators in Chile are accused of colluding after a large-scale investigation. Details regarding the massive scandal emerged recently with the National Economic Prosecutor’s Office (FNE) filing an antitrust lawsuit with the Competition Tribunal (TDLC).
Three Gambling Operators Accused of Colluding When Filing Casino License Bids
In its lawsuit, FNE named as defendants Dreams, Enjoy, Marina del Sol, three recognizable operators within the casino industry in Chile. The trio is accused of “conspiring to manipulate the outcome of nationwide bidding processes to award casino operating licenses.” The aforementioned bidding was completed back in 2020 and 2021 with the Superintendency of Gaming Casinos (SCJ) tasked with monitoring the process.
While the activity has gone unnoticed for some time, an investigation was launched following a complaint from February 2022, filed with the SCJ. Ultimately, the investigation led to the antitrust lawsuit where not only the three companies were named but also five top executives from those companies were accused of colluding regarding the bidding process.
It’s important to note that Dreams, Enjoy and Marina del Sol hold a 90% share of the gambling industry in Chile and have an estimated $400 billion in gross annual revenue. In that line of thought accusations against the three companies claim that their bids or as described by the FNE “economic offers,” were less than 1% of their average gross gaming revenues between 2018 and 2019. In contrast, on previous occasions, such bids were more than 20% of the average gross gaming revenue.
Termination of the Permits Requested, Fines Proposed for the Cartel
Jorge Grunberg, FNE’s head, labeled the three companies as “cartel,” and encouraged TDLC to terminate the renewed permits. He explained: “Thus, we ask the Competition Tribunal to terminate these permits so that the damages caused by the cartel do not persist throughout the entire duration of licenses improperly obtained by the operators.”
Grunberg pointed to the significantly lower economic offers presented by the three gambling companies. He said that if the bidding process was competitive, this would not have been the case.
“This agreement allowed Dreams, Enjoy, and Marina del Sol to renew their casino operating licenses for 15 years with economic offers much lower than what a competitive process would have guaranteed,“
Jorge Grunberg, head of FNE
In its lawsuit, the FNE requested the implementation of tough fines against Dreams and Enjoy. The requested monetary penalties amount to 171,354 Annual Tax Units (UTA) or approximately $151.9 million. The biggest fine was requested for Dreams, a total of $112.4 million, while Enjoy’s requested penalty was $36.8 million.
In addition, fines were requested for five executives, allegedly involved in the process. The list included Dreams’ general manager, Jaime Wilhelm, Dreams’ board chairman, Claudio Fischer, Dreams’ administrative and financial manager, Claudio Tessada, as well as Enjoy’s board chairman, Henry Comber.
According to FNE’s announcement, Marina del Sol as well as its executives may be exempt from fines as they complied with the requirements of its leniency program. As a result, FNE asked the TDLC to exempt Marina del Sol’s executives from criminal liability and fines under the program.
