The Governing Council of the Community of Madrid, Spain recently issued new rules that will make developing future casino projects more difficult. Under the changes, casino operators applying for Integrated Development Center status must prove their project is vital to the public interest. Public hearings will be held for each project to achieve complete transparency of the process and encourage fair competition. Also, new casinos must be located on public lands or on private lands that are classified as urban or urbanizable. After meeting all of the requirements, each project must be approved by the municipal landowners.
Community of Madrid President Cristina Cifuentes said the changes will strengthen the regulation process and cover all legal gaps that could arise during the discussions of a new project.
The changes can be traced to Madrid’s rejection in July of U.S.-based casino operator Cordish Gaming’s proposed $3.5 billion Live Resorts Madrid. The project was expected to receive the Integrated Development Center designation, which provides significant tax advantages and flexibility in land usage.. However, local officials rejected Cordish Gaming’s application. Cordish Gaming management learned about the project’s cancellation via a leak to the media rather than from local government officials. In response, Cordish Gaming stated it had observed “very serious irregularities” in the application the process concerning “professional secrecy” of intellectual and industrial property. Cordish Gaming said it would “vigorously pursue the exercise of all legal actions that may be in defense of their legitimate interests against the regional government and the responsible persons concerned.”
Cordish Gaming said it will continue to make payments to the private owners of the parcel of land near Madrid’s main airport where the integrated resort was to be built. However, under the new rules, casinos only may be built on publicly owned land, to ensure that “the revenues generated by the sale of public land could be used to improve public services,” including upgrades to the transportation infrastructure necessary to support the expected influx of tourists to an integrated resort. The local government estimated building a train link to the proposed resort would cost $404 million, but Cordish Gaming had proposed spending only $18 million to add lanes to the existing highway.
Another issue according to the local government was that Cordish Gaming’s original proposal, submitted last December, was overly reliant on gaming and lacked sports and cultural amenities. Cordish submitted a revised proposal adding an artificial lake and beach but that also was rejected.
