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.
From that moment, Enjoy began to look for new business options. It entrusted the asset manager Asset Chile with the search for potential interested parties in buying the company or in some eventual alliance that would shore up its finances.
A Mexico-based company with its hand in the casino market might be showing interest. If it moves forward, though, it only wants part of Enjoy, meaning certain assets will be left out of any negotiation.
Transforming Chilean Gaming
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.
Logrand is a conglomerate that opened its first casino in Monterrey, Nuevo León, Mexico, in 2005 under the Paradise brand. It now operates a dozen gaming properties in six states in the country, and has a small presence in three other locations, according to company data. Its online casino platform is Strendus, the official sponsor of LaLiga in Mexico.
It also operates a number of sports bars in several casinos it operates. These include the Dubai Palace in Cancun, the Grand Leon Casino in Leon and others.
Should a deal move forward under the current structure, only Enjoy’s Chilean operations would interest Logrand. This would leave the company’s assets in Uruguay in limbo, forcing a separate sales process and a new buyer to enter the equation.
While sources have revealed some of the details regarding the deal, Logrand and Enjoy are keeping silent. They haven’t acknowledged the negotiations, and it’s not clear when they might reach a conclusion.
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 despite the fact that the group’s income totaled CLP165.7 billion (US$18.32 million), 8.26% more than the previous year. The spike occurred due to the removal of COVID-19 restrictions on the operations of casinos, hotels and other hospitality options in both 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 subsequently 21% higher than that reported in 2019, before the pandemic.
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%. However, in the second quarter, Enjoy reported 40% versus 37% for its main rival.
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