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Cirsa and Thunderbird in Chile court cases
Published:  01 July, 2006

Following the proposal by Chilean parliamentarians to present a bill to strengthen some areas of the Gaming Law that have been called into question, and the Supreme Court decision to rule in favour of the Casino Commission (SCJ) and against the North American Thunderbird Resorts Inc., came news of the legal suit filed by CIRSA.

The Spanish company is seeking redress in the Antofagasta Court of Appeals, a move that has caused the suspension of the casino bidding process in the city of Calama. The legal action was taken against the Municipal Council of Calama in order to overturn its unfavourable finding on the casino project presented by CIRSA, a leading operator in Latin America and Spain. The project for the city included the construction of a 5-star hotel, a Balthus Spa and casino that would provide an ample offering of entertainment, tourism and new business. CIRSA’s plans also included the reclamation of an oasis in the process of desertification, making a large 10 hectare park, and the construction of an archeological/ ethnographic museum. The company also promised to develop sport in the region. The CIRSA proposed to invest US$29 million in its project and to generate 563 new direct jobs in the city. Gaming professionals have commented that the casino licensing process in Chile seems to be becoming a political issue. Following the inconsistencies of the Regional Councils (CORE), which are entirely political bodies with their own agendas, the casino licences will finally be awarded by the Consejo Resolutivo (CR) comprised similarly of political appointees. Whilst the SCJ has professionals to advise on the evaluation of the casino projects, the result of their studies is subject to the vicissitudes of political power. It might have been preferable if the casino licences in Chile were to be granted through independent competitions as in Spain, or by technical tender where other interests would not prevail. Chilean parliamentarians Rodrigo Alvarez, Gonzalo Uriarte and Jose Ramon Barros are right in identifying the short comings of the present Casino Law, which elicits comments from gaming experts such as designing a horse by committee creating a camel, because it is impossible for entities as diverse as CORE and the CR to make uncontroversial decisions. Following the finding of the Supreme Court against the Santiago Court of Appeals resolution in favour of Thunderbird, the lawyer acting for the company stated, “We are surprised by the ruling and are conducting the relevant assessment to decide what legal measures to take.” Apparently Thunderbird has pointed out that the Supreme Court decision has not considered the facts of the case but only denied the legal recourse on the grounds that it was presented out of place. If that is the case then a questionable act has won on a technicality. When notified by the SCJ that its four projects tendered for Chilean casino licences were disallowed for administrative reasons, Thunderbird filed last September for legal protection against the Casino Commission’s decision. The Court of Appeals unanimously found in favour of Thunderbird but the SJC appealed to the Supreme Court. The judgement against Thunderbird presents the company with various legal measures to defend its rights, either in Chile or internationally. It is probable that a court injunction, if obtained, would once again halt the licensing process in the four regions where Thunderbird has projects in Antofagasta, Algarrobo, Rancagua and Talca. This would mean that CIRSA and Thunderbird, two important international operators, were in legal disputes in Chile. This controversy sets negative precedents for the image of the country, most of all for foreign investors.


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