Grupo Enjoy considers selling South America casino venues in wake of collapsed merger

Article by : Charles Perrin Aug 11, 2023

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According to recent reports, Grupo Enjoy is scrutinizing the value of its South American casino venues to sell them.

The Latin American gambling giant has been busy carrying out a comprehensive strategic review of its South American casino properties, and it is considering parting ways with the venues it presides over in Argentina, Chile, and Uruguay.

Supposedly, Chile’s Commission of Financial Markets (CMF) has been informed of Grupo Enjoy’s long-term intentions, and it is an intriguing development given a proposed merger with Dreams SA collapsed in April.

But what does this all mean exactly? And how will this affect Grupo Enjoy moving forward? We have the full lowdown on this story.

“Anti-trust” concerns

Initially, Dreams SA and Group Enjoy announced a merger earlier this year, which would make it the most prominent casino company in Chile.

At the time, negotiations had stipulated that 64% of the entity would be given to those with shareholdings in Dreams, while the other 36% would go to those with shares in Grupo Enjoy.

However, the National Economic Prosecutor, or FNE as it is known in its Spanish acronym, had qualms over a prospective deal.

The FNE laid out particular contingencies before they rejected the merger outright, citing a series of “anti-trust concerns,” suggesting that those involved in the deal had seemingly conspired in a way that would benefit them financially.

If anything, progress stalled, and the crux of the problem was competition related. Chile’s competition authority had severe reservations that one company could not control a significant proportion of the casino scene in the region and monopolize local arcades.

Strategic decision

Grupo Enjoy has come to accept the decision over the failed merger attempt.

And in response to the FNE’s judgment, Santiago-based financial advisers ASSET Chile SA responded with its own statement. Enjoy is working on “long-term strategic plans to resume profitability and analyzing possible alternatives for a strategic transaction.”

Grupo Enjoy manages nine casino/hotel properties, with Chile being its core market, although it has business interests in Argentina and Uruguay.

Had the merger gone through, Dreams and Grupo Enjoy would have operated 15 of the 26 casinos in the state, which equates to 58% of the local industry.

Brazil diversification plan

But Grupo Enjoy wants to expand its influence and set its sights on cracking Brazil.

In February, Grupo Enjoy launched its sports betting and casino platform entitled EnjoyWin.com.

And at the time, Marianela Artoni, Enjoy’s production and innovation manager, admitted that this project wasn’t done on a whim and had been mulled over meticulously.

She said: “Enjoywin is a project that has been in the making for a long time and was conceived with an obvious strategy: to offer an online betting site in the countries where Enjoy has face-to-face operations.

“EnjoyWin.com is the answer to the needs of thousands of clients, which will only be available in the Brazilian market for now.”

Brazil has faced many obstacles in its attempt to legalize online gambling, which is rather strange given that it is a country that boasts a population of over 200 million.

And given that the Brazilian online gambling market is poised to grow by over 19% by 2027, and could be worth as much as $ 3 billion, then now is the perfect time for Grupo Enjoy to reap the potential rewards that will arguably come with operating in the region. Also, as over 75% of its inhabitants have access to the internet, this can’t be overlooked.

Also, with over 150 million smartphone users in the region, the Brazilian online gambling industry has made serious strides quickly, and Grupo Enjoy should ride the crest of the wave.

Verdict

Ultimately, a potential merger between Grupo Enjoy and Dreams proved to be nothing more than a pipedream, and the proposal was resoundingly rejected.

While those connected with Grupo Enjoy may be disappointed to learn it is considering selling some of its South American casino properties, the company needs to move in a new direction and a fresh impetus.

After all, the bottom line matters most, and shareholders want a solid return on their investment.

The foray into Brazil sounds very promising, and perhaps this could end up being a core market if it can endear itself to residents and become one of the most prosperous gambling regions in South America.

All is not lost for Grupo Enjoy, and if that means severing its ties with Chile, then so be it. Only the actual impact will be known if this comes to a head.