For decades, Chile enjoyed a reputation for seriousness and predictability when it comes to generating confidence for investments by foreign companies in the country. But that seems to be changing, at least in the casino sector.
Canadian private equity fund manager Clairvest began investing in Chile more than a decade ago, but its president Michael Wagman now says that the changes proposed by the government in the way to auction the concessions to operate casino business in the country modifies was it was already established.
The 15-year concessions will be sold to the highest bidder, instead of giving preference to current operators, as they expected.
Clairvest has joined with four other operators of Chilean casinos to challenge the rules in court and the plaintiffs say they’ll take their case to the World Bank’s International Centre for Settlement of Investment Disputes if their suit against the local regulator doesn’t win them relief.
At stake is the reputation of Latin America’s most stable country, long a bastion of economic orthodoxy and pro-business policies in a region known for volatility. The casino operators see calling that prestige into question as their best chance of getting President Sebastian Pinera’s administration to reverse its plans.
The government is “not even close to sending the message that Chile is a safe place to do business,” said Wagman, who is serving as spokesman for the group.
Clairvest, which owns a stake in casino operator Marina del Sol, has put on hold potential new investments in other industries in the country, Wagman said.
Source: GMB / InterGame Online / Bloomberg
