Jorge Hank Rhon, president of the Caliente Group and a former mayor of Tijuana, Mexico, says new gaming taxes in Baja California are going to hurt casinos in the sector and put them at a competitive disadvantage compared to casinos across the border in the United States.
In December, the state imposed a 10 percent increase on gamblers’ winnings. The new tax took effect on January 1. Baja California—home of resort cities like Cabo San Lucas, San Jose del Cabo and La Paz—has more casinos than any Mexican state.
Governor Jaime Bonilla Valdez “is looking where to get money to be able to invest in the state,” Rhon said, so he established other state taxes that will affect hotel and restaurant owners, including a tax on foreign tourists.
The gaming tax “is going to hurt us—not only us, but the players,” he added, and said it was levied “without study or consideration.”
Rhon argued that the new taxes will backfire as players migrate to destinations that don’t tax their winnings. “In the search to raise more,” he said of the government, “unfortunately they will raise less.”
