October 14, 2004
(Edited translation compiled from Reforma, El Financiero, El Economista, Notimex, and a Chamber
of Deputies’ news release; Mexico City, October 13 and 14, 2004)
The Tourism Committee of the Mexican Chamber of Deputies
has introduced the latest version of the Federal Gaming with Wagers and Raffles Law that includes casinos. The final national consultation report on the proposed legislation was also submitted.
Committee chairman Francisco Xavier López Mena said
that the initial bill, that was submitted on April 29, 2004, had 175 articles whereas the proposal now has 233 articles after
having gone through the public hearing process.
However, at the suggestion of the private sector
the Tourism Committee will add a new impediment to the project, so that once the law is approved casinos will not be allowed
to open in Mexico for a period of five years. This measure is an effort to keep
Mexican entrepreneurs from being at a disadvantage vis-ŕ-vis foreign investors.
Francisco Javier Bravo Carbajal, chairman of the Tourism Committee’s Infrastructure Subcommittee, noted
that casinos in Mexico are coming although they still have to go through the committee and other legislative processes in
order to be approved. The Government and Finance Committees must also approve
the bill before it can be sent to the Chamber of Deputies as a whole.
The 58 new articles and provisions include means
to avoid money laundering, gambling addictions and unfair competition.
With respect to money laundering, because of the
fear that poorly regulated casinos could be a means for that criminal activity the legislation must meet the guidelines of
the international Financial Action Task Force on Money Laundering. Furthermore,
the proposal authorizes the Attorney General and the Secretariat of Finance and Public Credit to require and immediately obtain
needed information directly from the permit holder or corporation, and from officials, all of who must respond within 48 hours
after the application is verified.
The proposal is for casino investment to be 50 percent
Mexican and 50 percent foreign.
legislation limits the indiscriminate proliferation of casinos, authorizing only those that will guarantee successful competition
with casinos in countries that are more developed in this activity.
The first casino will be authorized to open
five years after approval of the Law so that Mexican businesspersons will have time to prepare. (Note: One piece said five years after approval of the Regulation of the Law. The April 29 document stipulates that the Regulation must be published within 90 days following formation
of the Federal Gaming with Wagers and Raffles Commission. The commission is to
be in place within 180 days of publication of the Law.)
The governing body over gambling and casinos will
be the Federal Gaming with Wagers and Raffles Commission that, in turn, will be under the jurisdiction of the Secretariat
of Government. The commission will only grant installation and operating permits
when casino specifications, equipment and construction characteristics are comparable to the top 20 gross income casinos in
the world, based on the year prior to the permit being issued.
As well, the commission will be able to set investment
minimums for each of the locations where casinos may be established. This in
order to assure that permit applicants have sufficient funds to finance casinos as required.
Casino advertising and publicity will have specific
rules and be controlled, regulation of casinos by the commission will begin during their construction period, and they may
not be built in areas around social tourism centers or within 200 meters of educational and religious facilities.
In order to give Mexican entrepreneurs a level playing
field with foreign investors, Bravo Carbajal said “the viable proposal is for casinos to open after a period of five
years from promulgation of the new law, this because businesspersons have asked for enough time to be prepared and to be in
a position to compete.” The five-year period is also designed to keep foreign
workers from displacing Mexicans who will have to be trained for the new jobs.
Presentation of the proposed legislation that could
authorize casinos in Mexico caused tourist entrepreneurs who oppose the project to protest in the Chamber of Deputies. The National Entrepreneurial Tourism Council (CNET) asked the committees to reconsider
sending the bill to the Chamber of Deputies as a whole.
CNET president Gordon Viberg and Eduardo Sánchez
Navarro, a hotel owner and developer from Los Cabos, Baja California Sur, where among the opponents who expressed concern
due to the possible negative effects casinos could have on society, as well as the repercussions on economic and security
issues. They called for a time period to be set prior to publication of the bill,
during which the National Autonomous University of Mexico would complete a study on the matter.