| | |  News Around the Republic of Mexico | September 2008 
Mexico to Reform its Gaming Law, with or without Casinos
 Barnard R. Thompson - MexiData.info
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| | Although laws ban most forms of gambling in Mexico, gaming machines are the big attraction inside this Tijuana minicasino. (John Gibbins/San Diego Union-Tribune) | | |
Mexico's Chamber of Deputies, the lower house of the nation's bicameral legislature, has established an ad hoc subcommittee to deal with what boils down to two areas. Firstly, legal, regulatory and fiscal matters related to gaming activities nationwide; and secondly, legislation that could lead to full-blown casinos in Mexico.
As noted last week (Casinos in Mexico - A Safe Bet or Endless Machinations?, by Barnard R. Thompson, MexiData.info, September 15, 2008), on August 12, 2008 the Tourism Committee of the Chamber of Deputies installed a new Gaming and Raffles Subcommittee to advance inquiries and legislation regarding gaming matters; police so-called 'irregular' casino-like activities that are operating outside the law or with questionable permits; and gain a future tax stream that is now but a trickle. And to address the casinos issue.
Ever since the 2004 passage of the Regulation of the Federal Gaming and Raffles Law (link to document in Spanish), and the issuance of new and/or updated permits in 2005 – that vox populi at least tied to the presidential ambitions of then Secretary of Government (Interior) and now Senator Santiago Creel Miranda (National Action Party, or PAN), the matter of permits has been festering. Given that, the Adjunct General Directorate of Gaming and Raffles, of the Secretariat of Government, has increasingly come under fire – especially by opposition party politicians and some pundits who, among other things, charge bias or suggest favoritism in the issuance of permits and/or oversight of permit holders.
Much of this with the justification that only a claimed 34 percent of gaming activities in Mexico are legal, or conversely that 66 percent of the gaming is unregulated and untaxed. As well, mavens say all of this could mean that many of the unlawful gaming activities are tied to organized crime and the laundering of drug money.
The initial meeting of the 14 member subcommittee (representing five political parties) took place on September 11, with a rather routine agenda for a first meeting. The two most interesting calendar items covered: [5] "Advances, strategies and results obtained during the first stage of the work plan regarding the gathering of information..."; and [6] "Methodology proposal in order to undertake the next stage of the work plan that consists of work sessions and summons appearances with the actors involved with gaming and raffles."
Subcommittee member Gilberto Ojeda Camacho (PRI, the Institutional Revolutionary Party), said that the work will be done in five phases: the compiling of information; working meetings and hearings; drafting of the proposed law; conclusions; and dissemination of the same.
According to a statement issued by the press office of the Chamber of Deputies, following the September 11 subcommittee meeting, one of the first things approved by subcommittee members was to urge the Secretariat of Government not to authorize a single new or expanded permit for gaming and raffles until the subcommittee has comprehensive analyses of all authorizations, as well as the gaming industry in Mexico.
Armando García Méndez (Alternative Party), who chairs the subcommittee, was quoted as saying "that they will deliver a gaming and raffles law proposal in four months..." Within the next month subcommittee members will meet with Abraham González Uyeda, Undersecretary of Government, and other ministry officials, in order to discuss the difficulties, García said.
The aforementioned subcommittee member Gilberto Ojeda said that the subcommittee is awaiting information from the Directorate of Gaming and Raffles in order to begin an investigation into gaming and betting parlors that presumably have counterfeit or bogus permits. The subcommittee is asking for a register list of all permits that have been issued by the Secretariat of Government, plus it will ask for a list of fake permits that have been found.
Sidebar to the press statement, Octavio Martínez Vargas (Party of the Democratic Revolution, or PRD), who chairs the Tourism Committee in the Chamber of Deputies, discussed black market sales and transfers of permits to third parties with a reporter from the Mexico City daily El Universal (September 12). Martínez told the reporter that "(gaming) concessions are being sold regularly under the table ... (each) costing up to US$2 million."
Getting back to the press communiqué, during the meeting an objective was set to authorize states and municipalities to close businesses that have slot machines, and to confiscate the machines insofar as they are unauthorized. In an interview, Martínez of the Tourism Committee said, "of each ten small business establishments seven have slot machines," the press statement concluded.
Everyone acknowledges that a revised Mexican gaming law is necessary, to replace the antiquated Federal Gaming and Raffles Law of 1947, and obviously this is to be a major part of the subcommittee's work. Plus casinos, if they are to be authorized, must be part and parcel of a new law.
Following the September 11 meeting Armando García, the subcommittee chairman, said that the goal is to have a new law ready within four months (probably building on one of the drafts that have long stagnated in the chamber's pipeline). And while it was not said outright, it was subsequently suggested to this observer that a vote on the legislation could come during next year's February through April regular legislative period.
García went on to say that a new law is needed insofar as gaming has become considerably more controversial over the past three to four years, this because of the increased number of betting establishments in Mexico and due to ineffectual regulations. Moreover, when asked about casinos García repeated what politically may be his safeguard catch phrase as he has used the implicit casino reference in variation before, saying that a new law is needed not to prohibit betting parlors but to regulate the activity.
And then there are several wild cards that will come into play with respect to casinos, over and above partisan political wrangling that is a sure thing – especially in Mexico's 2009 midterm election year. The Catholic Church, entrepreneurial organizations and unions, citizens' groups, addiction control activists, anticrime advocates – the latter being important due to the fear of possible infiltration by organized crime – and others can be expected to step into the fray, and it is yet to be seen which way they might sway the spheres of influence.
Barnard Thompson, editor of MexiData.info, has spent 50 years in Mexico and Latin America, providing multinational clients with actionable intelligence; country and political risk reporting and analysis; and business, lobbying, and problem resolution services. |
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