Tender launches in Uruguay for second large-scale casino in Punta del Este

In November Uruguay’s President, Tabaré Vázquez, signed a resolution which approves the feasibility of a new casino in Punta del Este. The new casino had already received favourable reports from the officials from the Ministry of Economy and Finance and Tourism.

According to a resolution signed by the President, the complex named “Cipriani Ocean Resort and Club Residences – Punta del Este” includes the construction of “a new San Rafael Hotel, casino, commercial premises, convention centre, theatre, spa and amenities, two underground garages and residences.” Both the Ministries of Tourism and Economy and Finance issued “favourable” reports that make the second private casino in Punta del Este possible.

The casino and hotel will form part of the Cipriani Ocean Resort & Club Residences Punta del Este on the former site of the emblematic San Rafael hotel. The bidding process has now begun and potential stakeholders have until January 20 to submit their bids.

The current regulations establish that licenses for casinos establishments must be granted by a public tender. According to local law the only other private casino in the popular tourist destination is allowed, if an investment equal to or greater than that of the former Conrad hotel casino is made.

As a result the clause that exists in favour of Baluma S.A (owner of the private casino at Hotel Enjoy the ex Conrad-) is being taken into account in the tender. In the terms and conditions rules state that the amount to be invested in the construction of the new luxury hotel must be equal to or greater than US$160m, without taking into account the value of the land of the infrastructure for the new facility.

In addition, as compensation, the bidder must commit to pay the state an annual fee made up of a percentage of the casino’s gross income and a minimum annual amount. The minimum annual amount payable will be US$7.8m in the first year, with annual increases of US$100,000 until 2026. After that date the annual amount will be fixed after the bidder has proposed its economic package but it must be equivalent to or greater than US$8.4m. The casino license will be valid for twenty years.

The San Rafael hotel in Punta del Este, has been closed since 2011, but was acquired by the Cipriani Group for more than US$40m in February 2018 after an agreement was signed by Giuseppe Cipriani.