Enjoy and Dreams Advance Plans for Latin American Gaming Company
Posted on: March 2, 2022, 10:15h.
Last updated on: March 2, 2022, 12:04h.
Enjoy and Dreams, two casino operators with commanding positions in Latin America, agreed to merge last year. Their plan is still developing but moved closer to the finish line this week.
Enjoy and Dreams are working on creating a behemoth casino company in Latin America and are now going through the regulatory maze.
This is one of the many stops the merger has to make along the way and is necessary to ensure anti-monopoly controls are properly enforced. There has been some concern that the merger would give the combined company too much power in certain areas. However, according to Dreams and Enjoy, that’s a non-issue.
Dreams controls most of the casino action in Chile, but Enjoy has several properties in the country as well. As a result, after formalizing their merger agreement in January, they have now presented their plan to Chile’s National Economic Prosecutor’s Office (FNE, for its Spanish acronym).
Mega-Merger Moves Forward
Both companies have argued that casinos are legal monopolies in Chile. There is only one permit per region. As such, they do not compete with each other. The Antofagasta casino, for example, does not overlap the clientele of the Enjoy Santiago Hotel and Casino or Hotel Dreams Pedro De Valdivia.
The companies argue that the law limits their prices as well. They cannot retain for themselves more than 15% of the profits, arguing that the remaining 85% must be returned to bettors. In the case of Enjoy and Dreams, the retention figures are around 6% and 7%, and they believe that the FNE could ask to maintain pre-integration levels.
Still, in an effort to ensure a smooth transaction and the completion of the merger, the two have agreed to let at least one property go. They chose Enjoy Santiago Hotel and Casino in Rinconada as the target, should regulators feel they should reduce their footprint.
Market Control to Continue
The merger will give the combined company 15 gaming properties throughout the country. Before the COVID-19 pandemic, Dreams and Enjoy controlled 76.4% of the gross revenue of the Chilean gaming industry. They also held 58% of operating permits.
Post-merger, Enjoy will remain as the new name of the company. It will control just under 60% of the Chilean casino market,
Ten of them are operating under active permits in Antofagasta, San Antonio, Rinconada, San Francisco de Mostazal, Los Angeles, Temuco, Valdivia, Castro, Coyhaique, and Punta Arenas. With these are also five municipal licenses in Iquique, Coquimbo, Viña del Mar, Pucón, and Puerto Varas.
The merger will also consolidate eight casino operations in Peru and one each in Panama, Uruguay, Argentina, and Colombia.
As of October 2021, according to the financial statements of the merger, Dreams recorded revenue of US$125.13 million. This was significantly more than Enjoy’s US$97.88 million. However, it also had more money tied up in assets, at US$581.1 million.
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