SUDI OZKAN AND THE STATE TURN A LEGAL ROULETTE
THE STATE COMMISSION ON GAMBLING REFUSES TO LICENSE A NEW CASINO OF THE ENTREPRENEURThe well known Turkish businessman Sudi Ozkan, owner of a chain of casinos, hotels, and duty-free shops in Bulgaria, initiated legal proceedings against the State Commission on Gambling, the BANKER weekly learned. The proceedings were provoked by two decisions of the commission that were not announced in public. One of them suspended the gambling licence of Intco International Casino Club AD which took care of the Prave gambling hall in the Sofia Rodina hotel until 2004. The second decision denied an operating licence for the same casino to Activ BG, another company related to Ozkan.The State Commission on Gambling issued a licence to Intco International Casino Club AD in 2001. At that time the company was represented by the Bulgarian citizen of Turkish origin Mustafa Mustafov. However, at the beginning of 2004, Activ BG AD became sole proprietor of Intco. The Sofia Princess Hotel and Trimontsium Princess Hotel controlled by Sudi Ozkan owned 95 and 5% stakes in its capital respectively. The sales price included the licence for the Rodina hotel casino. A curious detail is that the casino stopped operations in February 2002. The reason was that the hotel owner, Rodina Tourist-97, and the gambling company failed to reach an agreement on how electricity bills would be paid. The failure made the casino operator close the business. On February 5, 2002, a letter was sent to the State Commission on Gambling, then presided by Georgi Petrov, to inform it about the suspension of the gambling business. While the casino was still closed, the shares of Intco International Casino Club were sold to Activ BG. It is to be noted that the Law on Gambling requires that permission should be given by the State Commission on Gambling in case the company owning the licence changes its legal registration or ownership. In the case of the casino in Rodina hotel, such permission as well as permission for restarting the operations was requested on March 8, 2004. The legal debate between the Turkish businessman and the Bulgarian State might have probably been avoided if the State Commission on Gambling had not fulfilled a quick revision of the gambling hall before announcing its opinion. The inspection was ordered by the Chairman of the Commission, Metodiy Kirov, and was carried out by inspectors Krum Konov and Nikolay Todorov on March 30, 2004. In principle, controlling is not a bad thing, but that casino, although licensed, had not had customers for quite a long time. The two inspectors found out significant violations of the Law on Gambling in the closed hall. They wrote in the protocol that no reports on Intco International Casino Club's accounting activities had been discovered. Besides, the customers registration desk was not computerized as required, there was neither an arms detection system nor a panic button. Each of these violations is quite serious, provided that the casino was still operating. And even a revision act issued by the Sofia Territorial Tax Directorate last February indicated that it wasn't. The tax authorities concluded that at the revision time no games were being organized in the Prave casino because of suspended electricity supply. In fact, the electricity supply was suspended in November 2002. Anyway, based on the inspectors' conclusion, the State Commission on Gambling decided to definitely suspend the licence of the Intco International acquired by Activ BG. The measure was taken on April 14, 2004, but did not cool the enthusiasm of the Turkish entrepreneur who decided to apply for new permission, this time through his company Activ BG. Unfortunately, his second attempt turned out unsuccessful, too. After carefully analysing the evidence, the commission refused to issue a licence. It justified the decision with the fact that the applying company was owned by two companies with foreign capitals - Sofia Princess Hotel AD and Trimontsium Princess Hotel AD. In the first of them Sudi Ozkan owns 85% of the capital. In turn, the company holds 58% of Trimontsium Princess Hotel AD where Mr. Ozkan himself owns another 22 per cent. However, according to art. 6 of the Law on Gambling, games of chance can only be organized by Bulgarian commercial companies. The same normative act also stipulates that foreigners take part in casino operators if only the casinos operate in four-star hotels. Additionally, the foreign investor should have bought or built that hotel. Otherwise, he should commit himself to invest USD1MN in Bulgaria within one year and open at least 500 jobs. The members of the gambling commission claim that these requirements were not met by the Rodina hotel casino, therefore they did not consider the application of Sudi Ozkan. Logically, the legal advisers of Active BG hold a different opinion. In an appeal to the Sofia City Court against the gambling commission's refusal to issue a licence they noted that the company should be treated as a Bulgarian legal entity, since it was registered in accordance with the Commercial Act.