Cipriani’s Uruguay Project Under Threat Again
After voicing concerns about Uruguay’s plans to legalize online game, the Cipriani Group may pull out of its planned resort-casino project altogether. The group, which is now headed by Italian businessman Cipriani, has complained about the online gaming push for some time. It seems that its concerns have not been adequately addressed, which spells out serious problems for moving the building project forward.
The Cipriani resort-casino project may not go forward after all due to unaddressed concerns about a new online gaming bill. Gonzalo Facello/Unsplash
History of Cipriani’s online gaming bill concerns
Uruguay has long been a Mecca for gaming in Latin America given its openness for various regulated gaming verticals, including casinos and horse racing. It’s an attractive place for industry and players alike, which is also why the Cipriani Group has had a long relationship with development in the country.
Cipriani SA’s proposed project, Cipriani Ocean Resort & Club Residencies Punta del Este, has been in the works for some time. The project was much-lauded by government officials and industry affiliates as an attractive new project for Uruguay’s tourism initiatives as well as for future gaming tax collection.
Unfortunately, the issue of tax is exactly what initially irked Grupo Cipriani, representatives of which spoke on the senate floor in May. Speaking to the General Assembly in Montevideo, they asserted that the proposed online gaming bill in Uruguay left too many unanswered questions and possible loopholes for future games providers.
The main unresolved question was whether online casino platforms would be subject to the same amount of tax regulation to that of land-based casinos, like Cipriani’s future resort. The group maintained that it was unfair to tax one more heavily than the other, especially given the various overhead costs present for a brick-and-mortar site as opposed to an online platform. The initiative would put them at an inherent disadvantage.
The Cipriani resort would also be a major investment in the area of Punta Del Este. Though the group stood to make money from the project, too, likewise the government agreed with the development because it would also benefit greatly. That is why the lack of progress with concerns about online gaming were considered a blow to Cipriani SA and their relationship with Uruguay’s government until now.
Details of the online gaming bill
The issue has finally come to a head. Cipriani has stated that it will withdraw if Uruguay’s legislature does not address its concerns with the proposed online gaming bill. So far, Uruguay’s Treasury Commission gave the okay for the online gaming bill to move forward, but have not tried to appease Cipriani.
It seems that Cipriani’s concerns have also changed. Rather than only worrying about the tax and license fee issue, the company is concerned about the rule that states that only land-based casino operators will be allowed to offer online gaming at this time. While on the surface, that sounds like it would be good news to casino operators, Grupo Cipriani thinks otherwise.
The problem is that the resort project is still in development. It still has not received its final project approval. It is rather at a stage of adapting modifications proposed by local authorities. That means, the casino would not be able to step into the online gaming market as quickly as competitors who already have land-based sites in operation.
Cipriani SA also takes issue with the delineation between “online games” and “online games of chance.” As of now, its activities would be divided between the National Directorate de Casino and the National Directorate of Lotteries and Pools, which leaves them in an uncertain position of which organization to report to. Unless these concerns, and further concerns about the Banca de Quinielas, are addressed, Cipriani may well withdraw completely from Uruguay.
