Chile’s robust casino industry is gearing up for a major move from leaders Enjoy and Dreams, which will soon merge their operations into one joint company. Though the news was announced earlier this year, the merger is still in progress and will likely be final by the end of 2022 or start of 2023. This will make them by far the largest casino business in the country, with control of 58% of the industry.
How will Enjoy and Dreams operate their new joint company?
The merger has gone through official channels within Chile, including review by the Commission for the Financial Market (CMF). Documents shared with CMF stated that once the merger is finalized, Dreams will essentially control 64% of the new business, while Enjoy will control 36%. This means that both companies’ respective shareholders will own those percentages of the business, respectively.
Once Enjoy and Dreams have the stamps of approval they need within Chile to continue the merger, the new casino company will likely aim their focus on other verticals including electronic gaming, according to statements by Henry Comber, the President of Enjoy’s Board of Directors. He emphasized the importance of diversification for the health of the company and its clients.
In addition, Comber’s counterpart at Dreams, Claudio Fischer, stated that the merger is in some ways a response to the challenges posed by the Covid-19 pandemic. He believes that the new consolidated business will be stronger in dealing with these kinds of challenges. In a press release, he said:
“The new company will combine all the experience of both groups and [will provide] a financial strength that will allow the business to face the new challenges that the effects of the pandemic and the development of new technologies have imposed on the Latin American gaming and entertainment industries.”
Next Steps for Enjoy and Dreams Merger
Both companies appear confident about the success of the upcoming merger. However, there are several hurdles to climb before it is approved by the relevant Chilean authorities. CMF has now received the terms of the agreement, which are confidential and outline their plans for operation.
The companies have now also shared their plan with Chile’s National Economic Prosecutor’s Office (FNE) for further deliberation.
Part of the reason for the regulatory rigamarole the companies now face is Chile’s anti-monopoly laws. It has been a concern for some whether the merger would give Dreams and Enjoy too much power within the casino industry in the South American nation, but they maintain that it is not an issue.
Their arguments are that Chile already limits casino operations to one license in each region, meaning that casinos would not compete with each other over the same turf anyway. Furthermore, Chile has fairly strict laws about profit retention for casino companies. Even if merged, the new company could not retain more than 15% of their profits; by law, 85% has to be rewarded back to betting customers.
To help move the deal along, the companies have decided to sell one of its casinos, Enjoy Santiago Hotel and Casino in Rinconada. They hope this will be enough for those in charge of finalizing the decision within the government to allow the merger to move forward.
The new joint company will not only run casinos in Chile, but also in other parts of Latin America, including Argentina, Panama, Uruguay, Peru, and Colombia. All in all, Chile’s casino industry has shown positive signs of bouncing back post-pandemic. Recent reports showed that Chile’s casino industry contributed nearly $90 million USD in tax for 2021.
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