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PRTC Insists in Transparency of Airport Gaming Machine Project

By on September 16, 2016

Tourism Co. Executive Director Ingrid Rivera Rocafort (CB photo/Juan J. Rodríguez)

Tourism Co. Executive Director Ingrid Rivera Rocafort (CB photo/Juan J. Rodríguez)

SAN JUAN — The first phase of a project that will eventually install 200 electronic gaming machines in three terminals of the Luis Muñoz Marín International Airport in Carolina was launched Friday, with Puerto Rico Tourism Company (PRTC) Executive Director Ingrid Rivera Rocafort making the announcement.

The PRTC director explained that the first phase consists of the installation of 120 machines at the A and B terminals that service JetBlue. The second stage is expected for completion next October with the installation of the remaining 80 machines, comprising an additional 20 in Terminal A and 60 in Terminal C.

“This operation represents a range of projected revenue for PRTC that starts at $807,000, based on an estimate of $45 in profit per machine per day, and $1.8 million, based on estimates of $70 in daily profit for each machine. These estimates are based in the total of daily profits per machine and obviously are on the conservative side as of this moment,” Rivera Rocafort explained.

“For this project, the PRTC, which is the operator, invested around $125,000 for the machines’ data and transmission system, as well as their installation. Aerostar carried out the necessary improvements to the infrastructure so that the equipment could be installed and there is a lease being collected for the space that these machines occupy. Aristocrat Technologies, a multinational company that specializes in gaming, is the entity that will provide the gaming machines through a lease, the operating system, the money dispensers, and the technical and operational structure; they were also part of the installation process,” she added.

Rivera Rocafort went on to explain that the lease of the space to Aerostar makes up 28% of the machines’ net revenue. On the other hand, the payment to Aristocrat would be of 30%, also from net revenue. According to these numbers, and using the $1.8 million annual revenue scenario as a model, the PRTC would be paying Aerostar around $1.5 million annually in rent due to the lease of the gaming machines. Said expenditures would total $3.3 million annually, which exceeds the yearly revenue estimated by PRTC’s own executive director.

“We estimate that all of this investment must be recouped during the first month or before the first three months after it starts operation, based on the profits that will be generated,” said the PRTC official, although the numbers offered during the press conference proved contradictory.

Regarding the allegations by Caribbean Business sources about the absence of a bidding process to identify the supplier of the gaming machines, as required by law, Rivera Rocafort explained that is was obtained through other methods, although she didn’t concretely indicate why they decided to use that mechanism and not a bidding process.

“Aristocrat had the opportunity to provide the machines for this project through a request for proposals. Its participation will be 30% of the machines’ average profit, or an estimate of $15 per machine per day, whatever is higher. This process was carried out through invitation, because all of the invited companies had to have a Puerto Rico manufacturer’s license and there are only four companies who have that license,” Rivera Rocafort said referring with Bally, Aristocrat, Blueberry and G-Tech.

“This process has been transparent, in compliance with all the rules, rigorous and competitive where, finally, Aristocrat fulfilled all of the requirements of the request for proposals, and it was selected by a committee that had members of PRTC’s legal division. In summary, we complied fully and all of the related documents are available for anyone who wishes to see them,” she indicated.

(CB photo/Juan J. Rodríguez)

(CB photo/Juan J. Rodríguez)

Rivera Rocafort also explained that Rule 8788 of the PRTC was exclusively written to regulate the gaming machines that would operate at the airport and tourism piers. It was presented before the Puerto Rico State Department Aug. 12 and began to be enforced on Sept. 11.

“This was carried out after we published a notice in the press, after we received comments from consumers and the public at large as well as organizations such as the Puerto Rico Hotel & Tourism Association. [The ruling] was also approved by the PRTC board of directors before being taken to the State Department. The entire process has been fully compliant,” she said despite previous remarks from the chairman of the House budget and treasury committees, Rafael “Tatito” Hernández, who admitted to Caribbean Business that the due process of public hearings to amend Act 48 of 2013 was not carried out.

Rivera Rocafort insisted that the gaming machines in the airport do not constitute a traditional casino and that they would not compete with the rest of the casinos established in different hotels in the San Juan metro area. The executive director also said that the security component is a priority for the PRTC in the regulation of such machines.

“Security will be established with a customer service official and personnel from the PRTC’s games-of-chance division. The division will have a monitoring system through cameras and will record the operation 24 hours. There will be signs indicating that minors cannot play the machines, and security personnel will be on hand to make sure it is followed to the letter,” she said.

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