Mexico casinos heading for tourist destinations

As part of Mexico’s efforts to revamp gaming legislation, casinos could soon be making an appearance at tourist destinations in Acapulco, Baja California and Riviera Maya. The plan is to use casinos to boost key tourist regions, while scepticism remains over introducing casinos in the country’s urban areas. New legislation is going through a lengthy process to overhaul the Mexican gaming sector and detach its historical links to corrupt activities. Current regulation was enacted some 70 years ago and in-depth analysis is required to revive market. The so-called Federal Betting and Raffles Law passed the House of Representatives last December and is currently under debate in the Senate. According to Mexico’s Interior Ministry, Segob, there are currently 297 licensed casinos operating in urban areas. But antedated laws have enabled casino license holders to lend their rights to third parties, leading to an influx of unregulated operations. Over the past year, the government closed around 77 casinos and seized thousands of slot machines, paving the way for a new, regulated industry. Illegal casino operations have been a rampant problem in Mexico and the Association of Gaming Equipment Manufacturers claims that 15pc of the 90,000 slot machines in the country operate without an approved license. Machines are being confiscated and destroyed all across the country from easily accessible locations such as pharmacies, grocery stores, markets and newsstands. In an attempt to stamp out illicit activity and curb the amount of gaming activities in urban areas, while the government continues to “clean” the industry, Segob has confirmed amendments to the law will be made that allow casinos to open in resorts. Specifics of the law’s language are expected to change, but that won’t stop the resorts from taking action to bring casinos to their properties. A significant figure in Mexico resort and tourism real estate business, Miguel Angel Lemmus, has confirmed initial interest of the proposed law by major international developers. The first two companies that have made their intentions public are Hard Rock International and Mundo Imperial, which have made official presentations for casinos in Cancun and Acapulco, respectively. Based on the number of permits issued by previous federal governments, expanding casinos to resorts could see the number of licensed facilities rise to more than 775 sites. President of the Tourism Commission of the Chamber of Deputies of Mexico, Agustín Barrios Gómez, said the expansion would depend on the interest of the federal government to promote certain areas. Developers would be required to invest a minimum of MX$ 225m (US$ 15m) for a new casino, explained Barrios Gómez, which would limit the number of licenses and provide better control. The legislator also said the Advisory Council of Gaming would be established under the law and headed by Segob to oversee the industry, contribute to public policy and provide transparency of accounts. Other amendments in the new gambling reform will be to increase the minimum age of gambling in land-based casinos from 18 to 21 and ensure all venues are more than 500 metres from schools, churches, hospitals and archaeological sites. The licensing process will follow strict guidelines and operators would be able to apply for 10-year licenses with the option to renew for a second 10-year term. Introduction of the gaming law is now in the hands of the Senate. It is hoped that if senators green light the project during the current legislative session, it would become law by the end of the year. This would open a significant new market for both land-based and interactive gaming, attracting investors, operators and manufacturers to conduct business within a regulated environment.