According to the National Economic Prosecutor's Office, between 2017 and 2023, these firms accounted for 90 percent of the casino industry's revenue in Chile.
Chile.- The National Economic Prosecutor's Office (FNE) filed a request with the Tribunal for the Defense of Free Competition (TDLC) against Dreams, Enjoy, and Marina del Sol, the three main casino chains in Chile, and against five senior executives of these companies for having "colluded to affect the outcome of the national casino operation permit bidding processes conducted by the Gaming Casino Superintendence (SCJ) in 2020 and 2021."
In its request, the FNE asked the TDLC to impose fines for fiscal benefit totaling 171,354 Annual Tax Units (UTA), equivalent to USD151.9m and to also terminate the renewed permits for Dreams, Enjoy, and Marina del Sol in the mentioned bidding processes, extending their validity only until new gaming casinos that are awarded in a new competitive process begin their operations. These are the highest fines in history.
The National Economic Prosecutor, Jorge Grunberg, stated: "This collusion allowed Dreams, Enjoy, and Marina del Sol to renew for 15 years the permits they had to operate gaming casinos in the country, with economic offers that were significantly below those that would have been guaranteed by a competitive process. Therefore, we ask the TDLC to order the termination of these permits so that the damages from this cartel do not persist for all the years that the licenses, which were improperly obtained by the operators, last."
The highest fines were requested for Dreams, with 126,806 UTA (approximately USD112.4m); and for Enjoy, with 41,498 UTA (almost USD36.8m). Regarding the executives involved, the FNE requested the payment of 1,218 UTA (approximately USD1m) for the general manager of Dreams, Jaime Wilhelm; 941 UTA for the chairman of the board of Dreams, Claudio Fischer (about USD834,000); 761 UTA (around USD674,000) for the administration and finance manager of Dreams, Claudio Tessada; and, 130 UTA (almost USD115,000) for the chairman of the board of Enjoy, Henry Comber.
As for Marina del Sol and its involved executives, the FNE requested the TDLC to exempt them from the application of fines, for having met the legal requirements to access the benefits of the leniency program. In line with this, the FNE also asked the Court to declare the exemption from criminal responsibility for the facts charged to the executives of Marina del Sol covered by said program.
See also: Ruling in Chile: confirmation of a fine to Entel for gambling advertising during child protection hours
In its accusation, the FNE maintains that the required companies agreed that each would bid for the renewal of the permits they held at that time, without facing competition, and that they achieved their goal by additionally securing a lower economic offer than what would have resulted in a framework of free competition.
According to the investigation, initiated following a complaint made by the SCJ in early February 2022, the agreement was materialized through meetings and contacts that Wilhelm, Comber, and Imschenetzky constantly maintained between May 2021 and August 2022. Fischer also intervened, who, as chairman of the board of Dreams, in addition to approving the anti-competitive behavior of the company, participated in one of the key meetings developed for the execution of the agreement, and Tessada, who performed acts that facilitated anti-competitive coordination.
The evidence shows that, as the dates for submitting bids for the tenders developed by the SCJ approached, there were constant communications between these executives, which progressively became more explicit in relation to the idea of jointly addressing such processes.
Among the procedures carried out by the FNE, which allowed to accredit the cartel, are the measures of entry, registration, and seizure carried out on August 2, 2022, along with personnel from the O.S.9 group of Carabineros de Chile at the homes of Wilhelm, Comber, and Imschenetzky. That same day, Marina del Sol requested an indicator of application to the leniency program.
According to calculations made by the FNE, the offers made by Dreams, Enjoy, and Marina del Sol under this agreement represented an extremely low percentage of the gross revenues that the companies received from gaming.
For example, in the case of San Francisco de Mostazal, Rinconada de los Andes, and Talcahuano (main casinos of the required companies) their economic offers were less than 1 percent of their average gross gaming revenues from 2018-2019, which contrasts with the previous bidding process convened by the SCJ in 2018, where, although other places were tendered, the offers averaged percentages much higher than 20 percent of the companies' average annual gross gaming revenues.
The penalties requested by the FNE for the required parties are the highest recorded in a collusion requirement. "The fines consider the severity of a cartel that has been directly affecting the interests of the State and the resources of the municipalities where the operated casinos are located. We hope that, along with paying the fines we requested, the sentence orders the required companies to return the permits they obtained as soon as possible and reestablish competition in this industry," stated the Prosecutor.
In the request, the FNE explains that the magnitude of the fine requested to the TDLC is due to the severity of the conduct executed, the impact on public tenders, the market power of the required companies, the involvement of senior executives in the agreement, the awareness they had of the illegality of their behavior (they used code names, held clandestine meetings, erased evidence from mobile phones, and used temporary messaging) and the extent or duration of the damage caused.
In this regard, the FNE highlighted that between 2017 and 2023 Dreams, Enjoy, and Marina del Sol concentrated 90 percent of the revenues of the casino industry in Chile (which on average reached $400 billion gross annually) and that together they hold 70 percent of the permits to operate this type of establishments in the country.
