January 18, 2021

Tenerife sells its three casinos, the last publicly owned in Spain | Economy

Tenerife sells its three casinos, the last publicly owned in Spain | Economy



The Cabildo de Tenerife announced this Thursday at a press conference that the casinos of Playa de las Americas (Adeje), Taoro (Puerto de la Cruz) and Santa Cruz (Santa Cruz). Investors who want to take charge of these facilities must buy them together and make an investment of 24.9 million euros. Those of Tenerife are the last three that remained in Spain of public ownership, according to the Cabildo.

Tenderers are also required to submit a tourism investment project in one of the three municipalities where the casinos are located. The project involves a minimum investment of 4.5 million euros, which can be used both for new works and rehabilitation of existing facilities. The contest rules specify that the project must be developed within four years. The deadline for submitting bids is open until November 8. Then there will be a legal and financial review period of one month and another four for the presentation of offers.

The insular director of Finance of the Cabildo of Tenerife, José Carlos Pérez Frías, explained during the presentation that, in addition, they will demand of the bidders a level of economic solvency of 95 million euros and experience in the development of tourist activities.

The president of the Cabildo de Tenerife, Carlos Alonso, has referred to the favorable tax regime for the investment that Canarias has. "If companies that take over the casinos and generate employment or investment in the islands will not have to pay corporation tax," said Alonso.

Alonso explained during the press conference that the Cabildo has decided to win the casinos because they do not consider it reasonable for the public sector to manage a business activity such as gambling. "During the crisis there was a drop in casino revenues of 40% and it is not convenient for a local administration to have to deal with something like that," said Pérez Frías. The Cabildo has been forced in the last to restructure its public business sector due to the strong indebtedness it has, which currently amounts to more than 179 million euros, according to the Transparency portal of the Cabildo own. In 2014 the Tenerife administration already tried to sell the casinos although separately. Now he wants to make the tender more attractive by offering the three together to the investors.

12 million income per year

According to the information provided by the Cabildo, casinos have had an average revenue of 12 million euros per year in the last five years. Personnel expenses have also fallen during the last five years due to the reduction in personnel that the Cabildo began to undertake and currently represents just over 800,000 euros per year. The fixed expenses of the central office amount to one million euros per year. The figures provided by the Cabildo indicate that the operating margins have remained positive throughout the years 2006 and 2018, although they fell especially during the years 2009 and 2012. In 2013 the growth path was resumed and as of 2014 the margins of exploitation have remained around two and a half million euros each year.

Alonso and Frías have affirmed that the decision has the backing of all the political groups of the Cabildo, except Podemos, and they have assured that the bidders are obliged to keep the 121 employees that work in the casinos. "The sale of the casinos is a political and normative mandate," said Pérez Frías in relation to the Law of Rationalization and Sustainability of the Local Administration.

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