Cayley Taylor looks at the Argentine market.
While Argentina is the place to be when it comes to stunning natural beauty, a vibrant cultural life and possibly the world’s best steak, foreign casino operators are unlikely to be very enthusiastic about the business climate in the South American country of just over 44 million.
President Cristina Fernandez is well known for her populist measures and has kept private enterprise on edge in Latin America’s third economy since coming to office seven years ago. Admittedly, the economic landscape that Fernandez inherited after decades of government incompetence, corruption and even a bloody dictatorship is hardly a cakewalk, but critics argue that her heavy-handed policies could eventually backfire.
In the past few years one of the government’s main objectives has been to curb capital flight in order to avoid another calamitous financial crisis similar to that which shook the country in 2001 and 2002. As a result, it has limited imports, imposed capital controls and clamped down on foreign companies. This approach even led to the recent expropriation of the majority stake in the country’s biggest oil and gas producer, YPF, from Spain’s Repsol Group.
These kinds of hard-lined protectionist policies have scared off potential investment and left many foreign companies with few viable options but to seek higher ground elsewhere.
One such example is Madrid-based Codere, one of Argentina’s biggest operators alongside home-grown Casino Club and Spain’s Cirsa. Exasperated by business-thwarting regulations, the firm announced its decision to move its Latin American base from Argentina to Mexico last year.
“From now on Mexico will be the source of all the resources needed to face the company’s financial difficulties in 2014,” assured Codere’s CEO Jose Antonio Martinez Sampedro in a statement released earlier this year.
Read the full article in the April issue of InterGaming
