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 Business News | February 2006 
Congressional Probe into Mexican Gaming Goes On
 Barnard R. Thompson - MexiData.com
Members of the Special Committee on Gaming and Raffles Matters of the Mexican Chamber of Deputies, the committee formed to investigate compliance with gambling regulations and recent authorizations, met in Mexico City in late January. And the committee members, with a mandate to review contentious permits issued by the Secretariat of Government in the spring of 2005, voted in favor of the main agenda item – to summons officials of the Vicente Fox administration before the congressional committee for a formal hearing on a yet to be determined date.
Arturo Chávez Chávez, Undersecretary of Government and chairman of the Gaming and Raffles Consulting Council, will be called before the committee to explain the legal bases for the Secretariat of Government having authorized new gaming parlor permits. This just before former Secretary Santiago Creel resigned from his powerful cabinet post in a failed attempt to become the National Action Party’s (PAN) candidate for president of Mexico.
In the months preceding Creel’s June 1, 2005 resignation, the ministry granted new permits, and updated some that had been previously issued, for 176 foreign books and 206 numbers game parlors.
Regarding Chávez, he is new to his post having been named January 9, 2006 to replace Felipe González González. González resigned so as to run for Congress in the July elections.
Others from the ministry who will be called along with Chávez are Manuel Fierro, head of the Government Unit; Héctor Alfredo Gómez Barrera, Adjunct Director General of Gaming and Raffles; and Marco Antonio Herrera, who is in charge of the Internal Control Department.
According to Héctor Gutiérrez de la Garza (Institutional Revolutionary Party, the PRI; Nuevo León), who chairs the congressional committee, Chávez and the others will be asked to clarify questions regarding suspected irregularities that have surfaced as a result of the investigation. Key among the questions is how new betting parlors have been opened, after it was determined there were no new applicable authorizations, Gutiérrez inconsistently added.
And depending on the outcome of that hearing, Creel himself could subsequently be summonsed before the committee.
As things now stand, it seems that a majority of the 12-committee members (PRI, four; PAN, three; Party of the Democratic Revolution, two; and the Mexican Ecological Green, Labor, and Convergence parties, one each) are siding against the new permits. And while it may be untimely to speculate on a future congressional vote, whether or not justifiable legal questions, partisan politics, or growing influence of gambling opponents have advanced the cause of the resistance must be taken into consideration.
The committee is also pushing Mexico’s Supreme Court to rule on a Chamber of Deputies’ complaint filed 15 months ago against the executive branch of government with respect to the Regulation of the Federal Gaming and Raffles Law. The challenge includes claims that the Regulation, promulgated by presidential order in 2004, is unlawful as portions violate the Federal Gaming and Raffles Law of 1947.
Article 2 of the Law only allows board games, dominos, dice, bowling, pool, ball games, races, most sporting events, and raffles. Then it states: “Games not listed will be deemed as prohibited for legal purposes of this Law.”
Furthermore, a law has precedence over a regulation.
The Regulation of 2004 includes a legal loophole that is being exploited by those with permits new and old from the Secretariat of Government, Gutiérrez said. A dodge permit holders are using to open more betting parlors and sites, with freshly acquired machines, updated technology and some new associates.
The lead sentence in Article 9 of the Regulation states: “Slot machines, in any of their models, will not be subject to authorization.” So subsequent to its 2004 publication new betting centers, with video and slot-like machines, as well as numbers game parlors and sports books for offsite wagering, began to spring up with operators claiming to have the requisite permits from the Secretariat of Government.
The Regulation melds the concept of ability and know-how (meaning so-called skill machines) with that of chance, and thus there is a proliferation of slot machines that are evidently allowed by the Secretariat of Government, Gutiérrez said.
A regulatory breach, according to PRI deputies who brought the constitutional complaint before the Supreme Court, now exacerbated with the issuance and possible misuse of the 2005 granted authorizations.
Still, in spite of all this permit holders are buying machines, and opening and expanding establishments. A fact that makes one ask – even if judgments come down against permittees, might sub rosa alternative agreements already be in place?
Barnard Thompson, a consultant, is also editor of MexiData.info. He can be reached via email at mexidata@ix.netcom.com. |
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