WEEKLY FEATURE: Movement in Mexico

The Mexican government has determined several possible locations for new casinos in the country. The sites will be chosen by a newly formulated gaming board. They include traditional tourist destinations including Acapulco (l.), Baja California, Cancun and Riviera Maya. The government also plans to curb runaway illegal betting.

Now up to 700,000 illegal betting shops

The president of Mexico’s Tourism Commission says a newly established gaming board will have the final word on the location of proposed new megaresorts. Because investors must spend a minimum of US$15 million, “for the first time gaming will become a real attraction,” Agustin Barrios Gomez said.

According sources, the country hopes to draw international travelers who want to gamble but are reluctant to patronize casinos in urban areas, many of which have been ravaged by the war between police and rampant drug cartels.

Since the height of the conflict in 2006, the country’s war on drugs has contributed to more than 106,000 deaths and caused a steep decline in tourism. The U.S. State Department, for example, has warned travelers about the perils of visiting “casinos, sports books, or other gambling establishments and adult entertainment establishments” south of the border.

With the drug war now largely contained and tourism on the rebound, the Mexican government hopes to build a new, safe and vibrant integrated resort industry. As part of the legislation, law enforcement would also curb illegal operations. The Association of Gaming Equipment Manufacturers estimates that 15 percent of current electronic gaming machines operate without an approved license. The legislation will also increase the minimum gambling age from 18 to 21, and work to combat money laundering.

According to Mexidata.com, the new bill is expected to get some pushback from neighborhood grocery stores and other businesses that offer forms of gaming to local patrons.

Marcela Gonzalez Salas, director of gaming regulation for the Mexican Interior Ministry, says many of the gaming machines, called “tragamonedas,” are illegal and will be eliminated. But it will take time; Gonzalez estimated that up to 120,000 unregulated machines could be in use.

The National Union of Gaming Machine Operators, known as Unama, says the number of illegal machines could be even higher. The organization estimates that up to 700,000 venues could now offer illegal games. Unama says some of these street corner businesses could be using the money to fund “criminal activities.”

At a recent conference, Gonzalez said a number of “diverse establishments” trafficking in “exploitation” have now been closed. They operated “as if they were mini-casinos,” Gonzalez said.

Eduardo Sanchez, a spokesman for President Enrique Peña Nieto, said the government is responding to “the complaints of parents, whose children abandon school and steal with the aim of being able to keep playing.”

Gonzalez says illegal casinos could generate US$2 billion per year, all tax-free. But Araceli Gutierrez, president of Unama, says the government is not doing enough to close down these operations.

“They should tell us where the confiscated machines are and the conditions they are in. I’ve told Gonzalez about this situation and her only answer is, ‘File a complaint.’” Gutierrez said.

Legislators also plan to reduce license terms and require current licensees to reapply. In 2013, Mexico reduced the terms from 40 to 25 years and also ended unregulated licenses transfers.

Meanwhile, unidentified “Las Vegas-based firms” have already expressed interest in a development in Cancun, according to a representative of the real estate industry in the country.