New gaming rules at odds with Mexican Constitution
With publication of Mexico’s new Regulation
of the Federal Gaming and Raffles Law on September 17, a period of
20 weekdays was set for it to go into effect. At the end of that period the Secretariat
of Government would be empowered, through issuance of permits, to authorize the opening and operation of certain types of
betting activities at racetracks, dog tracks, jai alai frontons, foreign books and bingo parlors after consultation, in some
cases, with a so-called consultation council. That council is to include four
officials from the Secretariat of Government and three citizen appointees.
The
new Regulation prohibits the installation and operation of slot machines, and it does not address casinos like those in Las
Vegas or Monte Carlo as it is not legally permitted to do so based on the prevailing law.
Yet a majority of congresspersons in the Chamber of Deputies believe that by publishing this Regulation the executive
branch of the Mexican government — basically meaning President Vicente Fox — has overstepped the line and invaded
their realm of responsibilities.
On
October 14, Institutional Revolutionary Party (PRI) deputies Héctor Gutiérrez de la Garza and Claudia Ruiz Massieu Salinas
presented a legislatorial point of agreement to the Chamber as a whole, asking for implementation of the Regulation to be
postponed for 90 days. The recommendation passed with 282 votes (the Chamber
of Deputies has 500 elected members).
Next,
following a proposal by the same two members of congress, a majority agreement was reached by the Chamber on October 28 to
interpose a constitutional challenge before Mexico’s Supreme Court that called for that body to annul the Regulation
and thus its immediate effects.
Upon
receipt of the demand, Justice José Ramón Cossio Díaz notified the Mexican Senate so that members could participate in the
hearing process, plus he declared that the effects of the Regulation will not be suspended during the time needed to adjudicate
the challenge, a period that is expected to take at least four months.
The
constitutional challenge is mainly based on two legal arguments: First, the President and his executive branch are not authorized
to legislate gaming and raffle matters that, according to Article 73 of the Constitution, are the responsibility of the legislative
branch of government.
And
second, the published Regulation violates the very law it is designed to regulate by creating entities not contemplated in
that Federal Gaming and Raffles Law of 1947. A consultation council is not considered
in the Law, plus it grants functions to the Secretariat of Government that are unauthorized in said Law. In Mexico, as a general legal principle a regulation of a law may not allow or regulate attributes that
are not projected in the law.
Once again the Supreme Court must hear a legal matter that pits two branches of the federal government
against one another, in order to resolve a conflict that could have been avoided through political negotiations.
The requested 90-day deferral period would have given the Government Committee of the Chamber
of Deputies time to act. Furthermore, the Chamber as a whole would have had time
to vote on the pending reforms to the Federal Gaming and Raffles Law that if approved as is would authorize casinos in Mexico. If that bill were approved in the 90-day period, the Regulation could have been amended
or adjusted according to the new law before going in force.
There
is nothing to keep the Chamber of Deputies from voting in favor of the new federal gaming law (that even though it is the
subject of high-profile debate still seems to be languishing in the Government Committee), while at the same time annulling
the Regulation and its legal provisions. By doing so, this could bring an end
to the constitutional challenge by invalidating the Regulation although the applicable actions that have been completed in
the interim might stay valid.
This
is an urgent decision that must be made by the deputies, so that future investors will have the legal certainty that, in accordance
with the new law, they will be able to obtain all permits in a timely and reasonable manner.
This in place of requisite permits being issued by two separate authorities.
Enrique Andrade González (a www.mexidata.info columnist) is an attorney and Mexican business consultant with offices in Mexico City.
Lic. Andrade, who received his LL.M. in Constitutional and Protection (“Amparo”) Law from the Universidad
Iberoamericana, is also a law professor at the Universidad Intercontinental. His
e-mail address is enriqueag@andradep.com.
