Noticias

The FNE filed an antitrust suit before the Competition Tribunal (TDLC) against Dreams, Enjoy, Marina del Sol, and five top executives from these companies for conspiring to manipulate the outcome of nationwide bidding processes to award casino operating licenses. These processes were organized and overseen by the Superintendency of Gaming Casinos (SCJ) between 2020 and 2021.

In its lawsuit, the FNE requested fines totaling 171,354 Annual Tax Units (UTA), equivalent to approximately US$151.9 million and the termination of the renewed permits granted to Dreams, Enjoy, and Marina del Sol during the bidding processes. The FNE stated that these permits should remain valid only until new casinos, licensed through competitive processes, begin their operations.

“This agreement allowed Dreams, Enjoy, and Marina del Sol to renew their casino operating licenses for 15 years with economic offers much lower than what a competitive process would have guaranteed. Thus, we ask the Competition Tribunal to terminate these permits so that the damages caused by the cartel do not persist throughout the entire duration of licenses improperly obtained by the operators”, said FNE´s head, Jorge Grunberg.

The highest fines requested were for Dreams and Enjoy, amounting to 126,806 UTA (approx. US$112.4 million) and 41,498 UTA (approx. US$36.8 million), respectively. Regarding the executives involved, the FNE requested fines of 1,218 UTA (approx. US$1 million) for Dreams’ General Manager, Jaime Wilhelm; 941 UTA (approx. US$834,000) for Dreams’ Board Chairman, Claudio Fischer; 761 UTA (approx. US$674,000) for Dreams’ Administrative and Financial Manager, Claudio Tessada; and 130 UTA (approx. US$115,000) for Enjoy’s Board Chairman, Henry Comber.

As for Marina del Sol and its executives, the FNE requested that the TDLC exempt them from fines, as they met the legal requirements to access FNE´s leniency program. The FNE also asked the TDLC to declare that Marina del Sol’s executives covered by the leniency program are exempt from criminal liability.

The Cartel

In its lawsuit, the FNE argued that the accused companies conspired to bid only for the renewal of the permits they already held, avoiding competition on those placements and submitting lower economic offers than those that would have emerged in a competitive bidding process.

According to the investigation, which was initiated after a complaint filed by the SCJ in early February 2022, the collusion was executed through continuous meetings and communications held by Wilhelm, Comber, and Imschenetzky between May 2021 and August 2022. Fischer also played a role as the Chairman of the Board of Dreams, not only by approving the company’s anti-competitive actions but also by participating in key meetings held to execute the agreement. Tessada facilitated anti-competitive coordination through his actions.

Evidence shows that as the deadlines for submitting bids for the SCJ-led tenders approached, there were constant communications among these executives, which increasingly became explicit regarding their concerted approach to the processes.

Among the investigative measures taken by the FNE to detect this conduct was a dawn raid conducted on August 2, 2022, with personnel from the Chilean Investigative Police at the residences of Wilhelm, Comber, and Imschenetzky. On the same day, Marina del Sol applied for the leniency program.

According to FNE calculations, the offers made by Dreams, Enjoy, and Marina del Sol as part of this agreement represented an extremely low percentage of the gross revenues obtained by these companies from gaming activities. For example, in the cases of San Francisco de Mostazal, Rinconada de los Andes, and Talcahuano (the main casinos operated by the accused companies), their economic offers were less than 1% of their average gross gaming revenues for 2018-2019. This sharply contrasts with the previous SCJ bidding process held in 2018, where the offers averaged over 20% of the companies’ average annual gross gaming revenues, despite other locations being tendered.

Sanctions

The penalties requested by the FNE are the highest ever sought in a cartel case in Chile, significantly surpassing fines imposed previous cases, such as those concerning the poultry industry (110,000 UTA), shipping companies, supermarkets, and salmon feed (90,000 UTA in each case).

“The fines reflect the severity of a cartel that has directly harmed the interests of the state and the resources of municipalities where the casinos are located. We hope that, in addition to paying the fines we have requested, the judgment orders the accused companies to return the obtained permits, restoring competition in this industry as soon as possible”, Grunberg stated.

In its complaint, the FNE explained that the amount of the fines requested is due to the seriousness of the conduct, the impact on public bidding processes, the market power of the companies involved, the participation of senior executives, their awareness of the illegality of their actions (using code names, holding secret meetings, deleting mobile phone evidence, and using temporary messaging), and the extent of the damages caused.

It is worth noting that between 2017 and 2023, Dreams, Enjoy, and Marina del Sol accounted for 90% of the casino industry revenue in Chile (averaging $400 billion in gross annual revenue). The three firms collectively hold 70% of the licenses to operate such establishments in the country.