Portugal's Supreme Administrative Court Overturns €15 Million Casino Compensation Ruling

Major Legal Shift in Casino Compensation

The Supreme Administrative Court of Portugal has revoked a decision made by the Arbitral Tribunal that mandated the state to compensate the concessionaire of the Algarve casinos with over €15 million. This announcement was made public on Friday.

In its ruling, the Supreme Court accepted the appeal from the Portuguese State and deemed the action brought forth by Solverde - Sociedade de Investimentos Turísticos as "totally unfounded".

Background of the Case

Solverde sought compensation due to the significant impact of the 2008 economic crisis on their gross revenues, which plummeted dramatically. The court noted that, for the first time, the annual contributions to the state were no longer calculated based on the standard 35% of gross revenues from the concession. Instead, they were based on minimum compensation values set by law.

Court's Findings

The arbitral court had previously ruled in July 2024 that the state must pay compensation, asserting that the 2008 financial crisis constituted a change in circumstances that adversely affected the concessionaire's activities, resulting in a decrease in their gross revenues.

The arbitral tribunal ordered the state to return the difference between the annual contributions and the minimum contributions paid by Solverde from 2012 to 2014, totaling €15,527,756.40. However, the Supreme Administrative Court has now annulled this ruling.

In a detailed 53-page decision, the judges of the Administrative Litigation Section of the Supreme Court upheld the appeal, revoked the arbitral ruling, and concluded that the action was entirely unfounded.

Economic Context

The 2007-2008 international financial crisis, triggered by the collapse of Lehman Brothers, had widespread repercussions on major financial institutions, influencing economic conditions in Portugal and beyond.