Chile’s Casinos, Enjoy and Dreams, in Hot Water with Collusion Case
Chile’s two largest casino operators, Enjoy and Dreams, recently nixed their plans to merge after pushback from Chile’s authority on competition. After a drawn-out process in which they argued against the accusations of monopolization of the casino industry in Chile, the two companies finally agreed to amicably retreat from the plan, which has been officially announced in January 2022. However, the two companies still face problems thanks to a collusion case involving a third Chilean casino operator, Marina del Sol.
Chile’s two biggest casino operators are currently under investigation for collusion, and evidence is mounting against them.
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More trouble on the horizon after a doomed merger
Towards the end of Enjoy and Dreams’ difficult merger journey, important news was released regarding a case in which both casino operators are accused of collusion. In early April, Diario Financiero broke the story, which involved irregularities around the bids for recent casino operating licenses.
A separate casino chain Marina del Sol, which currently operates four casinos across Chile in Calama, Chillán, Talcahuano and Osorno, was involved in evidence that suggests underground negotiations between Enjoy, Marina del Sol, and Dreams regarding these bids, constituting “facilitating behaviors” according to the news outlet.
Diario Financiero’s report suggests that a secret WhatsApp group was used by senior executives of these casinos to discuss bidding processes and negotiate their own deals for who would win operating licenses.
In fact, this is not the first part of the puzzle when it comes to the collusion case. It started much earlier, in early February 2022, when an anonymous tip was given to Chile’s National Economic Prosecutor’s Office (FNE). The tip had to do with all three casino operators — Dreams, Enjoy and Marina del Sol — and suggested collusion.
This resulted in an investigation that is ongoing, with the plot thickening thanks to Diario Financiero’s recent revelation. So far, the investigation has drudged up accusations of not only collusion but also fraud and other clandestine plots. As a part of the process, equipment has been seized and executives deposed in court.
What set off the collusion investigation?
Though the initial tip-off of the case was anonymous, it was likely in response to Dreams and Enjoy making their merger plans public, which happened only in the month before the tip came in to FNE. Further complications within the casino industry may have led to more evidence being shared.
For example, following the bids in question, which happened in October 2021, Marina del Sol let go of CEO Francisco Muñoz. Muñoz filed a wrongful termination case against the casino operator, asking for $4.75 million USD. Within his case, he shared confidential documents from his tenure at the casino, which then implicated the company in the WhatsApp negotiation scandal, as well as implicated Dreams and Enjoy.
Marina del Sol’s owner, Nicolás Imschenetzky was alleged to be involved in the messaging, as well as with in-person meetings. These appear to have swayed the normal bidding process, thus manipulating the results of who received operating rights.
Manipulation of bidding processes for casino and betting licenses is an ongoing problem in Latin America. Unfortunately, most of the time it is difficult to prove. Accusers can be made to appear like sore losers, who are only grabbing for a last opportunity to change the results of a “fair” bidding process.
The Chilean case is much different of course, because there appears to be substantial evidence gathering. It is also possible that this is part of why Enjoy and Dreams have backed off of their long-standing merger plans, adding further fodder for suspicion and doubt.
So far, Imschenetzky has maintained his own innocence. Enjoy has likewise denied all accusations. The matter will continue in the courts, and though it remains to be seen what kinds of consequences are on the table and how high up they will go, the case has the power to severely shake Chile’s casino industry as it relates to those who already hold the most privileged positions within it.
