Latino America

The Gaming industry opened the expo season in London the first week of last month with ICE Totally Gaming 2015, a sizzling event that definitely melted the event brand name and might now change to “London’s Hottest Gaming Show”. Because the event was indeed so hot that the freezing climate of the English capital could not match the intensity of presentations by leading global gaming companies, which showcased products and systems such as NOVOMATIC Group, grandly taking up space the size of a football pitch to accommodate its 18 companies and subsidiaries from around the world on its magnificent stand. We publish a comprehensive review of ICE 2015 in this issue and for Spanish language readers in our sister magazine Casino International AMERICANO. At long last global industry leaders have caught on to the fact that Latin America is one the regions where gaming product is installed in bulk, owing to great steps in development that have been on-going for more than twenty years, when I left Sun International, leader in South Africa, to do my industry bit in my beloved Peru, and where this great South African company has now taken additional steps to become leader of the Latin American region. Below we report on plans of Sun International’s Latin America operations merger with Chilean company Dreams S.A., aiming to become a conglomerate of magnificent casinos, hotels, and gaming properties located from Panama to, almost, Tierra del Fuego and become the region’s Dream Team! But these days, the buzzword is Colombia, and straight from London we flew to Bogota to see how Coljuegos with leaps and bounds has development plans to take the industry into the 21st Century. We had the chance to participate in a regulatory workshop, which we’ll report on later. No doubt those who attend FADJA 2015 in the second week of April can be sure to see that Coljuegos is in the middle of a big push to improve the Gaming sector of this great South American country. And as time is short and whizzes by, we are on our way back to receive our daily sunshine, first in Puerto Rico, for March 18-19 at the Caribbean Gaming Show 2015, and then back to Bogota, on April 9-10 for FADJA 2015, which promises much, but not before taking a break in Punta Cana to charge up batteries, fifty shades of tan, a few Cuba Libre and some polar cold beers. See you all there! Sun International announces plans to merge with Dreams S.A. South Africa’s gaming giant, Sun International has notified the Johannesburg Stock Exchange of plans to create Latin America’s largest gaming group by merging business properties in the region with Chile’s second largest operator Dreams S.A., with a view to list the new entity on the Santiago Stock Exchange or another public market. In a Memorandum of Understanding with the shareholders of Dreams S.A. to merge its casino and hotel Latam portfolio of assets, Sun International announced Friday 13 February that an agreement had been concluded with the Chilean company. In a statement, Sun International said it had “previously stated its strategic intention to grow its Latin American portfolio of assets, which consists of Monticello in Chile, the Ocean Club Casino in Panama and a casino currently under development in Cartagena, Colombia that is expected to be operational in the first half of 2015 (‘Latam portfolio’). Sun International owns 100% of the businesses in Panama and Cartagena and has recently increased its interest in Monticello to 99% in order to have control over the strategic direction of these assets, including the possibility of merging them with others in order to create a more diverse and meaningful portfolio.” It is anticipated that the merger of assets will give Sun International approximately 50% of the combined entity. As part of the Proposed Merger, Sun International will increase its shareholding to 55% and consolidate the results of the Merged Entity. The Proposed Merger is classified as a category 1 transaction in terms of section 9 of the SE Listings, requiring shareholder approval amongst other conditions. Dreams is a Chilean based company and is a leader in the gaming and entertainment industry with operations in Chile and Peru operating 3,877 slot machines in these countries. The Dreams properties have similar components to those of Sun International, including hotels, casinos, entertainment and food & beverage facilities. The company has built a strong base in Chile where it now has six casinos and it has more recently expanded into Peru where it operates four smaller gaming establishments focused on Lima, with well advanced plans to expand in this region. Dreams has a strong locally based executive management team that has been involved in building the business from inception and has extensive knowledge of the wider Latin America region. This executive team will lead the Merged Entity. The shareholders of Dreams comprise the Fischer Family which holds a 51% interest with the remaining 49% owned by Entretenimientos del Sur, a private equity investment vehicle controlled by Citigroup. In the year ended 31 December 2014, based on the unaudited results, the combined businesses generated EBITDA of approximately US$100 million. The merger is subject to execution of definitive transaction documentation, due diligence and approvals from relevant gaming authorities. The tentative closing date is anticipated in the third quarter of the 2015 calendar year. COLOMBIA – COLJUEGOS reports on MET connection tests According to a progressive schedule established by Resolution 1400 of 2014 for the connection and report online of electronic slot machines (Máquinas Electrónicas Tragamonedas – MET), of Tuesday 3rd, February, 34 Type A operators conducted transmission tests of at least one MET to be connected from May 4th, 2015 to the datacentre of Colombia’s gaming regulator, Coljuegos. In all, 28 Type A operators failed to comply with the schedule milestone, and Coljuegos has stated that procedural administrative process will begin against the companies that failed with such mandate. Colombia’s Resolution 1400 of 2014, regulates the implementation of an online system to connect and report all slot machines – MET, authorized by Coljuegos, and has defined a progressive timetable for the connection of the inventory of all MET registered by operators on August 1, 2014. Compliance failure may be remedied once the operator performs the transmission test through a system provider for MET online connection, who is duly certified by one of the laboratories endorsed by Coljuegos. Type A operators are those who on August 1, 2014 had 50% or more of its MET inventory located in municipalities with population over 100,000 inhabitants. PANAMA – Gambling revenue up by more than US$96 million in 2014 Panama’s Ministry of Economy and Finance (MEF) reported that the State, “received US$ 96,101,377 from gambling activity in 2014, while in 2013 revenue for the country was US$80,126,979. This represents an increase in revenues of almost US$16 million or around 20%.“ In a report, Eric Rios, Executive Secretary of Panama’s Gaming Board of Control (JCJ), explained that “gambling machines registered highest in 2014, including slots type “A” at US$43 million; casinos operating gaming tables came in at US$ 25 million; while slot machines type “C”, report to US$12 million. Overall gaming revenue in the country was enhanced by income from gambling transactions, such as “licence transfer fees“, which generated US$13 million, televised bingo and game programs, among others, which reflected an increase of 8% compared with the previous fiscal year. In Panama, JCJ has been pursuing effective monitoring, contro and authorization of gaming and gambling nationwide. The MEF document added that control of the JCJ policies “has resulted in favour of the State treasury allowing an increase in the resources available for social programmes and public investments that the Government runs.” COLOMBIA – FECOLJUEGOS celebrate 15 years To celebrate its 15 years of existence, FECOLJUEGOS will hold on April 7, 2015 the first Casino and Bingo Business Operators meeting at the Sheraton Bogota Hotel in Salitre, Colombia. Under the slogan “Shaping the Future of our Business” and with the objective of strengthening the relationship between concessionaires and the State, business people, suppliers and public servants related to the gaming and gambling sector, the event will take place in a common space for the exchange of ideas and discussion on the present and future of gaming activity in Colombia. The Conference includes speakers of great transcendence in the sector such as Cristina Arango Olaya, President of Coljuegos, Senator Juan Carlos Restrepo, Member of Senate’s Fourth Committee, Luis Edmundo Suárez Soto, director of the UIAF, Monica Mendoza, of the Program of Responsible Business and Insurance of UNODC, and Jaime Varela Vidal, lawyer specialist in gaming. In addition to conference meetings, there will be a participatory panel between the attendees networking luncheon to meet and strengthen professional and commercial relations. Inscriptions are open to gaming concessionaires operating in the country and officials related to the activity. For more information, call +571 547 4944, visit www.encuentro.fecoljuegos.com.co, or email info@fecoljuegos.com.co