The tragedy of 52 deaths as a result of a fire in a Mexican casino has had ripple effects that have not only outraged officials on both sides of the border, but also put at risk the survival of the gaming industry in the nation.

The fire at Casino Royale in Monterey was allegedly started by arsonists associated with the Los Zetas crime organization trying the shake down the owners of the casino. Half a dozen arrests were made last week and the suspects said they were scolded by their bosses for killing so many people. The aim of the attack, said the suspects, was to scare the owners of Casino Royale into paying protection money.

According to Mexican officials, it is commonplace for casinos and other businesses to be approached by drug gangs and threatened if they don’t pay up.

But corruption extended into city government, said some observers. Monterey Mayor Fernando Larrazabal accused the Casino Royale and other 12 casinos of violating municipal laws. The casinos were allowed to remain open after obtaining federal court injunctions.

But the impact of the fire went far beyond the tragedy. The governor of Nuevo Leon, Rodrigo Medina, said the crime should be used to root out corruption in the casino industry.

“It is very important to use this tragic event as an opportunity to once and for all” impose order on the casinos, said Medina.

Several hundred Mexican troops raided nearly a dozen casinos in Monterey after the attack, detaining three individuals. More than 3,500 slot machines in Nuevo Leon were seized by authorities.

But Nuevo Leon wasn’t the first jurisdiction to crack down on safety inspections in the casinos. The Guadalajara municipal government closed down five of the 10 casinos in the second-largest Mexican city. The Playboy casino in Cancun was shuttered for violations of a number of safety codes. And in Mexico City, officials ordered inspections at 17 casinos and suspended the license of a casino owned by the Spanish company, Codere because it lacked fire extinguishers and adequate emergency exits.

Mexico City officials said safety measures would be inspected, and the casinos would be required to present “proper and updated land-use documents,” as well as proof that the size of the facility matches what is indicated on their permits.

The tragedy also ramped up tension between the U.S. and Mexico. Mexican President Felipe Caldron called the attack an "act of terror and barbarism,” but suggested that the appetite of the U.S. for drugs is fueling the wave of violence currently enveloping his nation.

“The economic power and firepower of the criminal organizations operating in Mexico and Latin America come from this endless demand for drugs in the United States,” he said. “We are neighbors, we are allies, we are friends, but also, you are responsible.”

More than 40,000 people have died in violence since Calderon has cracked down on the drug cartels.

And former President Vincente Fox has suggested that the Mexico government and the cartels declare a cease fire, causing law-abiding citizens on both sides of the border to complain that a cease fire would be tantamount to surrender. Fox also suggested that the U.S. consider legalizing drugs to defuse the illegal narcotic trafficking.

Since the owners of Casino Royale have yet to surface, George Grayson, a professor at the College of William & Mary, suggested that one of the competing cartels could own the casino, “because gambling parlors are superior machines for laundering millions of dollars of drug money.”

The gaming industry in Mexico has exploded since Calderon took office in 2006, expanding from 198 gaming facilities to 790 in 2011, according to Processo magazine. But only 235 of them are considered legal. In Nuevo Leon, there are 57 casinos, but 31 of them are illegal. Processo also uncovered the participation of public officials in the ownership of many Mexican casinos.

The tragedy renewed calls for the Mexican legislature to revamp the current murky laws surrounding the industry. A law passed under the Fox administration allowed new licenses for lotteries and bingo parlors with electronic games, but did not change a 1947 law that bans casino-style gaming. The result is a confusing mix of laws and regulations that allows each Mexican state to interpret from themselves.

“It is now urgent that we open a debate in Congress on the law regarding games of chance and lotteries,” said Senator Ricardo Torres Origel, a member of Mexico’s ruling PAN party. “The majority of casinos are operating unlawfully and this is a topic that cannot be ignored, regardless of the underlying issue of organized crime.”

Interior Minister Jose Francisco Blake Mora promised an investigation into the licensing of the bingo parlors, insisting that his organization has not issued any new licenses since 2006.

Some of these businesses have licenses, but there are others that work in accordance with court injunctions,” the minister said. “The Ministry of the Interior will remain very attentive to these types of establishment. Those that have licenses will work in strict compliance with the law and as for those that don’t, we will take the appropriate action until we’re able to put them of business.”

Nuevo Leon’s Medina wants his state to ban the addition of any more casinos, and will ask the state legislature to draft and pass such a law.

By Staff