Eden Leisure accuses Dragonara of delaying tactics on new casino

Casino operator Dragonara Gaming have stood by its claim that a selection process awarding a concession for a new casino to a rival bidder is flawed, saying that it will allow the facts to emerge in court.

On Friday, the Eden Leisure Group requested that a court refuse the application for a warrant of prohibitory injunction requested by Dragonara Gaming Ltd against the Privatisation Unit.

Dragonara Gaming applied for the injunction late last month, alleging flaws in the process which resulted in the proposal submitted by Eden Leisure Group being selected as the preferred bid for a new casino concession.

Dragonara Gaming, which have a 10-year concession on the Dragonara Casino in St Julian’s, were also selected for a second concession.

But the company is contesting the decision by the PU’s evaluation committee, saying that the original expression of interest was for one casino concession, and that its offer for an up-front cash offer was three times that offered by Eden Leisure.

Franco Degabriele, Dragonara’s business development director told MaltaToday that the company will challenge the “evidently vitiated selection process” on 17 November in court. “We shall deliver the necessary submissions that need to be made and to bring our evidence on the vitiation of the process. We are totally committed and determined to exhaust all remedies available to us.”

The legal tussle came about following the PU’s selection of Eden Lesiure’s bid for the concession to operate a casino in St Julian’s.

Last Friday, an application filed by lawyers Ian Refalo and Jacqueline Grech on behalf of the Eden Leisure group accused Dragonara Gaming of abusing the legal process in order to stifle competition.

It reasoned that the injunction and inevitable lawsuit were intended to delay to the granting of the concession to Eden Leisure, possibly for years, a situation that would clearly benefit Dragonara Gaming and its current casino operations.

Claiming that Dragonara had assumed that the concession would be awarded to them, Eden Leisure pointed to a letter sent by Dragonara to the Privatisation Unit stating “at this stage there can be no justifiable reason why discussion have not yet commenced between Dragonara Gaming Limited and the Privatisation Unit with a view to granting the concession”.

“This”, said Eden Lesiure, “lays bare their intentions”.

“It is evident that Dragonara wanted to impose their will on the evaluation process, in spite of the fact the Privatisation Unit had already declared that the proposal submitted by Eden Leisure was projected to yield the highest revenue and gaming tax, thus providing long-term economic benefit to the Government of Malta,” the company said in a new judicial protest.

In the court application, Eden Leisure described Dragonara’s initial offer, of some €4 million, as “so exaggeratedly high that it was almost twice as expensive as all the other proposals submitted” and referred to correspondence indicating that the Privatisation Unit had reassured Dragonara on several occasions of the transparency and probity of the process.

It further claimed that the only real reason that Dragonara was alleging that the process was flawed is that it wasn’t chosen as the preferred proponent and not due to any legal nullity.

The application called on the court to throw out the request, not least because “even at face value, the elements required by law for the obtaining of the injunction are lacking”.

Eden Leisure added that even had it been the case that Dragonara were suffering damages by losing the concession, “an injunction is unnecessary… because, should Dragonara’s claims be justified by a court decision, any losses it incurred would be recovered.”