Monday, December 31, 2007

Actual ‘Casino’ Gaming in Mexico? Yes and No, Perchance

By Barnard R. Thompson

“Gaming today is alive and well in Mexico, based on – or maybe in spite of – an outdated 1947 law, an ambiguous regulation issued by presidential decree more than 50 years late, and a number of permits granted under a political cloud in 2005.  And too, there are the underground fly-by-night activities in makeshift casinos floating outside the law.

“Yet such an ominous introduction may be unjust, insofar as the law works, the Mexican Supreme Court has ruled the 2004 regulation legal, and the validity of the 2005 permits has been upheld.”

The aforesaid is the beginning of the chapter on Mexico, that I had the privilege to write in the just released edition of the book Internet Gambling Report, An Evolving Conflict between Technology and Law – Tenth Edition; River City Group LLC; ISBN 978-0-9717718-5-7.

And as we enter 2008, gambling in what I like to call “casinos lite” is growing.  But too there seem to be more and more questionable and illegal establishments, some operating in the relative open with debatable permits, whereas others are clandestine – and unlawful – setups that while small have full-blown casino gaming.

All of which brought 2007 to a close with a flurry of actions, events and news stories that may be setting the stage for legislative change in 2008, which could include the consideration of all-inclusive casinos.  Or maybe this was little more than the harbinger of a new decades-plus cycle of politics as usual in place of actually doing or accomplishing something.

The “remote betting centers” (books) and gaming parlors referred to as “casinos lite” are establishments that operate according to the latest Mexican Supreme Court judgment on the Regulation of the Federal Gaming and Raffles Law of 2004, and the 1947 law itself, and that have all requisite permits – a number of which were controversially issued in 2005.  The numbers game licensed parlors have “electronic terminals,” as the bingo-type machines are euphemistically called in Spanish, which look almost the same as slot machines.

But too, according to a recent report that originated in the Mexican Senate, throughout 2007 there was significant growth in what is referred to as a “black market” of betting center and gaming parlor permits.  As an example, reportedly off-the-books permits were issued by Vicente Fox administration officials in early 2006, and at least one opposition party senator is using this to justify a current call for a congressional investigation into past and present corruption in the Secretariat of Government, the ministry responsible for the gaming permits and authorizations.

Currently the General Directorate of Gaming and Raffles, of the Secretariat of Government, is being audited by the Office of the Superior Auditor of the Federation.  In turn, the Secretariat of Government filed a constitutional challenge against the audit in early December with the Mexican Supreme Court.  Seemingly the ministry wants to block the audit as it includes a review of all permits issued to date and the procedures followed, as well as confirmation that due diligence took place to insure applicants met all of the requisites.

The State of Nuevo León, especially its capital city of Monterrey, has long been near the center of the debate due to a claimed teeming number of betting parlors.  Yet this hotbed of so-called casinos also shows that partisan politics are part and parcel of the controversy and dispute.

In early December, criminal charges were filed with Mexico’s Attorney General against Roberto Correa Méndez, Adjunct Director of Gaming and Raffles, alleging responsibility for the proliferation of illegal casinos and gaming parlors in Monterrey.  The complaint was filed by Ernesto Pompeyo Cerda Serna, president of the Convergence Party in Nuevo León, who also asked for possible collusion between federal, state and municipal officials – including federal judges who have issued amparos (writs of protective injunction) – to be investigated.

Cerda Serna claims that the officials have unlawfully issued gaming permits, sold for their own enrichment.  And he named eight enterprises that are consequently in operation and supposedly illegal.

Actually Cerda Serna had voiced his complaints earlier, when Senators Felipe González (National Action Party, Aguascalientes) and Ricardo Monreal (Party of the Democratic Revolution or PRD, Zacatecas) agreed that the growth of gaming in Mexico needs to be explained.  As well, Federal Deputies Pablo Trejo (PRD) and Gerardo Sosa Castelán (Institutional Revolutionary Party) have called upon the Supreme Court to reject the Secretariat of Government’s challenge of the audit.

As to when steps might be taken, Mexico’s holiday period ends January 7, 2008, whereas Congress will reconvene February 1.

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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.  He can be reached via e-mail at mexidata@ix.netcom.com.