Last week the Chile Executive gave the green light to a request from a group of Senators to change the 2005 Casino Law, which had sought to end Municipality owned casinos in 2015. In fact the outgoing Administration responded to intense lobbying from mayors from seven cities with municipal casinos, who had seen gaming contributions dwindle after the opening of the new casino resorts under the current Law, with multimillion dollar investments.

On Monday, the manager of the Casino Association, which groups 12 of the 15 new resort casinos, said that the Executive's decision affects the new investors: "According to the Law, there is a time scale for the development of casinos in Chile, with set regulations including a time frame for the tenders. The possibility of a change in the Law alters a bit the outlook we had in 2005, which offered security to investors. As things stand, there is much we can say because of the changes to future tenders that we have planned".

The changes to the Law should enable the municipal casinos to carry on operations for another ten years, until 2025. However, a lawyer for the group of seven municipalities has expressed the view that the Government offer is not sufficient, as the Mayors would prefer a change in the Casino Law that is permanent so that the municipal casinos operate for an indefinite time and well beyond 2025.

The investment in Chile’s new casinos, which comes close to US $1 billion, has been greatly supported by the local population because of the resort features that the Law demanded of the investors for the casino properties. As seen in the report on the Monticello Grand Casino & World Entertainment, which opened with high end celebrities, such as J-Lo in concert with Marc Anthony, Latin heart throb and salsa king. The Municipal casinos, some of which date back a few decades, will need a huge cash injection and modern operating systems to compete.

The mayors, senators and the Government have done their bit, but a Law change will not be sufficient for the old casinos to affect revenues, motivate trade and get more people through their doors, when they have the choice of Las Vegas type entertainment with swish hotels, discos, golf clubs, and restaurants for all the family in places like Mostazal, some 30 miles away from Santiago, Chile’s capital city, down the Pan-American highway. The old casinos need investors, and changing the 2005 Law is not a good sign for them. (E-12.24.09)

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