When Chile authorised seventeen new casino licences outside the Santiago area the whole legislative process was praised for its smooth, speedy and sensible approach. When the appointed Superintendent of Casinos decided to rule out the six regional applications of Thunderbird Resorts Inc. things changed and the process in those six regions has stalled.

Last September Superintendent Francisco Leiva resolved that the Company's six bid submittals filed in August 2005 did not meet the minimum "capitalization" requirements. Thunderbird contends that the Superintendent's interpretation of the capitalization requirements under 'Casino Law 19.995' is based upon faulty and legally insufficient grounds. Thunderbird appealed the decision taken by the Superintendent and the Chilean court has ruled that no further action can be taken until the Court of Appeals considers the matter.

After a detailed analysis of its six licence applications, the North American company has decided to withdraw its projects in Concepción and Temuco to concentrate on Rancagua, Algarrobo, Talca and Antofagasta, where it considers it has a good chance of winning. Thunderbird has now been returned the sum of US$2.7 million in bank guarantees and deposits, after having requested the return of its deposits for Concepción and Temuco on 8 February. So far the Superintent of Casinos has returned a total of over US$3.9 million to four companies excluded from the licensing process.

One Chilean newspaper, La Segunda, reported on 14 February that Francisco Leiva, despite the court ruling halting proceedings on the six licences, had ignored the instruction and thereby caused Thunderbird’s lawyers to seek sanctions against him. The date set for the Court of Appeals to hear the case brought by Thunderbird over its exclusion from the casino licensing process is set for 12 March 2006. (E-02.16.06)

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