Tottenham Report: Casino Concessions in Portugal in the Wake of the COVID-19 Pandemic By André Miranda February 8, 2021 at 10:00 pm In Portugal, to operate a land-based casino, operators must enter a public-tender procedure to be granted a concession. Considering the amounts of money involved and EU regulations, these tenders should be international. Usually, well before the termination of the concession contract, the Government should prepare and organize a new tender, which in complex concessions such as land-based casinos can often take 6 to 12 months to be completed. Lisbon and Estoril casino concessions run by Estoril-Sol Group and Figueira da Foz’ concession run by Amorim Turismo reached an end on December 31, 2020, but no public tender was initiated. Due to the COVID-19 pandemic, an exceptional and temporary extension of the term of these concessions was approved by the Portuguese Government through Decree-Law No. 106-A/2020. The concessions were extended for another year until December 31, 2021. As a rule, the extension of a concession should occur only in an effort to maintain the continuity of the services under concession and pending the award of a new concession. This extension of one year can be seen as controversial, since the Government back in May 2019 – before the pandemic outbreak – had announced that the tender documents were already being finalized and would be released very soon. Given the exceptional circumstances caused by COVID-19, the Portuguese Government claimed that the casino concessions that ended in 2020 had to be extended, because it was not possible to launch tenders for new concessions due to the adverse market conditions originated by the global pandemic. At the same time, it was also announced that to compensate losses caused by the restrictions in the operation of casinos due to lockdown and mandatory confinement, the Government would exempt the casino operators from the mandatory minimum fee to be paid in the beginning of 2021. This minimum fee was established in 2001 and has been paid every year since, regardless of the actual revenue of the casino. Due to the pandemic, gambling rooms closed doors for almost three consecutive months after March 2020, only reopening in the first days of June, after the introduction of several hygiene and safety measures to protect customers and employees, which also implied extraordinary expenses. With the evolution of a new wave of the outbreak and to comply with public health measures, casinos in the Lisbon area (Lisbon and Estoril) were forced to reduce the opening hours in summertime, due to the high number of COVID-19 cases by that time in Lisbon area. Then, after September, new confinement rules were enforced, and casinos had to close their doors at 11 p.m. during working days and were fully closed during weekends. Since the beginning of 2021, with the third wave hitting Portugal hard, all casinos in mainland Portugal are completely closed again. Casino concessions are a steady source of income to the Portuguese State. Between the years of 2012 and 2018, 183.5 million euros in taxes were collected from this sector. In the first nine months of 2020, casinos operating in Portugal registered a total revenue of 122 million euros, a drop of 48% compared to the same period in 2019. Lisbon and Estoril casinos recorded the biggest drop in gross revenue in 2020. Lisbon casino generated 38.4 million euros in 2020, 54.6% less than in 2019, and the Estoril casino registered almost 30 million euros, a decrease of 52.2%. On the other hand, online gambling in Portugal thrives and the pandemic itself has further increased the demand and the resulting profits. Since the confinement period in March last year, the online gaming attendance numbers skyrocketed in relation to other years. Whether it´s because of the restrictive measures we are facing or because people think it´s safer to gamble online without leaving their home, the truth is that many players who usually went to land-based casinos have migrated to the online platforms, continuing a trend that has grown in the past few years. The COVID-19 pandemic continues to affect everyone all over the world. It has also brought significant change to and had substantial impacts on the gambling industry worldwide. This disruption is expected to bring about a big decline in revenue for the global gambling industry, so it is understandable that in this context, the Portuguese Government has not initiated a public tender for the three casinos which ended their concession on December 31, 2020. Another four casino concessions will come to an end on December 31, 2023. This makes the Portuguese market very attractive for newcomers and a few have already expressed interest in participating in the tenders. The effects of COVID-19 in this industry cannot affect transparent and fair public tender procedures. The gambling market in Portugal has been closed for a long time, so it holds a big potential for high competition. Founding partner of the Lisbon based Law Firm Pinto Ribeiro Advogados, André Miranda is responsible for the coordination of public and regulatory areas, especially in the energy, real estate, gambling, transport and health sectors. He has a diverse legal practice with an emphasis in strategic advice to national and international clients in various areas of Law.