Gambling Magnet for the Rich or Money Pit?

At 4 a.m., the Tupamaro guerrillas stormed into the Carrasco Casino Hotel, packed away bundles of pesos and then dashed to their urban hideouts, weighed down by $330,000, money to finance their revolution.

That was in 1968. The casino has not seen as much action anytime since.

But this fall, after decades of neglect, Uruguay's capital city, Montevideo, will take a big step in recapturing the municipal casino's lost grandeur, selecting a company to restore the historic building and open the country's most luxurious gambling spot and resort.

That vision, to install a glitzy patch of Las Vegas in this sleepy South American capital, is designed to lure high-flying tourists whose private jets now land in Brazil and Buenos Aires but have yet to touch ground in tiny Uruguay.

City officials will announce the winning bidder by November, and the redesigned hotel and casino is expected to open before the summer of 2010. Two U.S. companies, Hyatt and the InterContinental Hotels Group, have submitted bids, along with the Portugal-based Pestana Hotel Group and the French company Accor, which hopes to open a hotel under its luxury brand, Sofitel. The restoration is expected to cost as much as $60 million.

"We want a hotel of the highest level. We're talking about tourists with a lot of purchasing power," said Jorge Rodríguez, a top adviser to Montevideo's mayor, Ricardo Ehrlich. "We are convinced that Montevideo is an appealing tourist destination. We're not going to compete with Rio de Janeiro, but it has attractions."

The Carrasco Casino Hotel used to be the top attraction. In the 1940s and 1950s, when high prices for Uruguayan beef and wool exports boosted per capita GDP to the levels of Italy and France, the hotel's gambling parlors, terraces and restaurants became high-society hangouts. The beaux arts structure, completed in 1921 on the Montevideo waterfront, helped give birth to what has since become the city's ritziest neighborhood.

Casino Troubles

The casino, however, hit a string of bad luck. In the late 1950s, Uruguay's golden age ended abruptly, converting the "Land of the Fat Cow" into a maelstrom of runaway inflation, labor strife and guerrilla warfare. In 1973, a military coup turned Uruguay, the "Switzerland of South America," into a brutal police state.

Visitors to the casino are greeted with the sight of a rusty entryway and a stained carpet.

Uruguay recovered its democracy in 1984 and more recently achieved economic stability. The prison in Punta Carretas that once held Tupamaro guerrillas is now a shopping mall.

Despite the U.S. economic meltdown, Uruguay's economy grew 13.1 percent in the first half of the year, according to central bank data. Unemployment is down to 7.6 percent from a high of 17 percent during the 2002 regional economic crisis. Tourism reached 2.3 million in 1999, up from 491,000 in 1976, according to government figures. Earlier this month, the National Institute of Statistics said poverty had decreased by 4.7 percent in the first half of the year.

But the Carrasco Casino Hotel never reclaimed its mid-century glory. Today, the regal building is ringed by a 12-foot-high, corrugated metal fence.

Like Uruguay's historic railroad terminal, built by the British in downtown Montevideo, the casino complex's hotel is abandoned, the sea views from the upper floors obstructed by dusty, shattered glass.

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