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Column 012604 Thompson

Monday, January 26, 2004

 

Might casinos be in the cards in Mexico?

 

By Barnard R. Thompson

 

Annually the prospect of Mexico reauthorizing gambling casinos, after a 70-year prohibition, reemerges.  And the possibility is again anticipated, that is if the congress might finally move the issue forward.

 

Still, first year deputies in the lower chamber may be politically motivated stumbling blocks, following in the path of their recalcitrant immediate predecessors.  In fact, there are early signs that opposition party deputies especially will drag their obstructionist feet on many legislative proposals now more than ever, with the goal of gaining partisan advantages in the 2006 presidential and congressional elections.

 

Then again, with respect to gambling and games of chance, a forthcoming government action just might get somebody — whether they are in favor of casinos or not — to do something.

 

Draft legislation, to replace the obsolete Federal Gambling and Raffles Law of 1947, was marked up in 2002 only to be let sit by the Chamber of Deputies.  The initiative, now identified as the Federal Betting Games, Raffles and Casinos Law, includes more than 100 articles that seek to regulate all gaming in Mexico, and to thus do away with the many clandestine betting operations (including illegal casinos) that are found nationwide.

 

But it is the legalization and phased opening of casinos, at select locations, that are at the heart of interest, controversy and politics.  As well, foreign collaborators are anxious to get into Mexico and many Mexicans see the foreign investment, plus the resulting jobs and tourism income, as definitely important to the future of the nation.

 

The current efforts toward legal reform were drafted in conjunction with studies and plans that propose a first phase concessionaires allowance of eight to 12 freestanding Monte Carlo or Montreal-type casinos, “betting centers” like those that were banned by President Lázaro Cárdenas in 1934.

 

Opponents today argue that where there are casinos there is organized crime, and that the facilities could become money laundries or worse.  The potential for crime and social ills that include drug trafficking and use, prostitution and gambling addictions are emphasized, in opinions that contend whole communities could be corrupted.

 

The different political parties have jumped back and forth in support and/or opposition to casinos over the past few years.  In April 2003, the National Action Party (PAN) revived past objections — and the Institutional Revolutionary Party (PRI) immediately countered with guarded support.  More recently the Democratic Revolution Party (PRD) came out publicly in favor of legalizing casinos.

 

President Vicente Fox, in late July, named Rodolfo Elizondo Torres to be Secretary of Tourism, and this immediately revived speculation as Elizondo had led PAN factional advocacy for casinos when he served both in the Chamber of Deputies and the Senate.  Soon after moving to Tourism, in his first press conference, Elizondo reiterated his enthusiasm for casinos.  Saying that “Mexico could become the second Las Vegas,” he maintained that regulated casinos are needed by the national tourism sector.  And in October the president himself seemed to throw down the gauntlet to his own party, when he sent representatives to congress to quietly lobby in favor of casinos.

 

But nothing really happened, in congress at least.

 

Gonzalo Altamirano Dimas, an official with the Secretariat of Government (SG), the powerful interior ministry — that includes regulatory oversight and permit issuance for betting activities and locations, games of chance (including so-called “skill games”) and raffles among its responsibilities, announced in December that a Regulation of the Federal Gambling and Raffles Law is near completion.  He also expressed the administration’s hope that congress will act on the pending legislation itself and amend the law during its next session that convenes in March.

 

“We have said there is an urgent (need) for the new legislation.  We are preparing a Regulation to go into effect immediately upon passage of the law, however if the legislation continues to be deferred we will still have to put the Regulation into action,” Altamirano said.  Emphasizing that the enhanced Regulation is needed for legal gambling and raffle activities, he also said it will be an important tool to ensure the fight against illegal gaming nationwide.

 

As to the current situation, Altamirano was asked if members of congress had been given any kind of ultimatum or deadline with respect to the casino initiative?

 

Noting that the SG does not interfere in the legislative process, he said: “We are not setting deadlines, we are simply waiting.  And we have been waiting since the last legislature (when) regrettably the subject of casinos became politicized and kept the legislation as a whole from moving ahead.”

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Thompson (a www.mexidata.info columnist) has spent over 40 years in Mexico and Latin America, providing business, professional, lobbying and problem resolution services for multinational clients. He is a principal in MIRA Associates, based in San Diego, California.  Thompson can be reached at mexidata@ix.netcom.com.