Mexican Company Considering Purchase of Casino Operator Enjoy
Posted on: September 26, 2023, 06:45h.
Last updated on: September 26, 2023, 03:21h.
The failed attempt between casino operators Enjoy and Dreams to merge their operations in Chile has left Enjoy trying to figure out what comes next. The deal was called off amid allegations of market manipulation. But a company out of Mexico might come in to turn everything around.
This past April, Enjoy and Dreams, the two largest casino operators in Chile, halted the attempt to unite their operations and create a local gaming giant. The National Economic Prosecutor’s objections to the integration and an investigation into possible collusion between gaming entities led its shareholders to reject the merger.
Enjoy then entrusted the asset manager Asset Chile to search for interested parties to buy the company or form some eventual alliance to shore up its finances.
A Mexico-based company may move forward but only wants part of Enjoy, meaning certain assets will be left out of any negotiation.
Logrand Entertainment Group, which operates several casinos and an online casino platform in its home country, has its eye on Enjoy. Unidentified sources with knowledge of the process told media outlet Pulso that the company is in early discussions for a potential purchase.
While sources have revealed some details regarding the deal, Logrand and Enjoy remain silent; they haven’t acknowledged the negotiations, and it’s unclear when they might conclude.
Logrand is a conglomerate that opened its first casino in Monterrey, Nuevo León, Mexico, 2005 under the Paradise brand. According to company data, it now operates a dozen gaming properties in six states and has a small presence in three other locations. Its online casino platform is Strendus, the official sponsor of La Liga in Mexico.
It also operates several sports bars in several casinos it operates. These include the Dubai Palace in Cancun and the Grand Leon Casino in Leon.
Enjoy Loses Ground
After completing a financial reorganization in 2022, creditors took control of Enjoy. Today, the largest shareholder is Euroamerica, which holds 15.25% of the company as of June 2023. Next is Penta Vida, with 11.66%.
In the first half of the year, Enjoy recorded losses of CLP38.64 billion (US$42.73 million), more than the CLP26.06 billion (US$28.82 million) in the first half of 2022. The decline was attributed to lower EBITDA (earnings before interest, taxes, depreciation, and amortization) and the effects of lower earnings from income taxes and deferred taxes.
This is even though the group’s income totaled CLP165.7 billion (US$18.32 million), 8.26% more than the previous year. The spike occurred because of the removal of COVID-19 restrictions on the operations of casinos, hotels, and other hospitality options in Chile and Uruguay.
As a result, operations in Chile grew 14%, while the Uruguayan business unit in Punta del Este fell 4% due to the effect of the exchange rate and a lower hold. Revenue between January and June was 21% higher than that reported before the pandemic in 2019.
Enjoy controlled 37% of the market share in Chile in the first half of the year in terms of revenue, according to its latest results presentation to investors. At the same time, Dreams controlled 39%. Enjoy reported 40% versus 37% in the second quarter for its main rival.
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