Casino bill still breathing in Old Mexico

Dec 17, 2002 4:49 AM

   Contrary to recent reports, casino legislation is still alive in Mexico. Barely.

   A congressional committee passed a federal gaming and lottery bill last week. The measure rules out legalizing casinos.

   But sources in Mexico City cautioned that the legislation still has many hoops to clear, including full votes on the floor of the House and Senate. The measure could be amended at any step along the way to include casinos.

   Ultimately, the bill must be signed by President Vicente Fox, who has in the past supported legalized gambling in areas frequented by foreign tourists.

   The committee’s proposed legislation permits casinos on cruise ships sailing in national waters. And insiders say that loophole could be widened to include tourist hotspots and metropolitan areas.

   Mired in a prolonged economic slump, Mexico is looking hard for new revenue. The current legislation is viewed as a way to tap more tourist dollars, without placing casinos in Mexican cities.

   But some 2,500 illegal gambling dens already operate throughout the country — and make off with millions of dollars tax-free. Industry experts conservatively predict that Mexico’s gaming market is at least a $3 billion-a-year enterprise.

   “We can’t continue to believe that by ignoring the problem it will cease to exist,’’ said Luz del Carmen Lopez Rivera, a congresswoman who supports legalized casinos. “Lack of rules propagates clandestine arrangements, bribes and all the vices that result from an activity without any control.’’

   Several Las Vegas operators have been quietly eyeing the Mexican market. Harrah’s, which recently established its presence in San Diego County, has publicly stated that it would consider forming partnerships with Mexican investors.

   But there are no sure bets in Mexican politics these days, says Carlton Geer, director of CB Richard Ellis’ Global Gaming Group.

   “It’s an ebb and flow situation, balancing tourism revenue with the negatives associated with gaming,’’ he tells GamingToday. “At this point, there seems to be a shift against casinos. The opponents appear to be in control  . . . for the moment.’’

   Jorge Nunez, a deputy with the ruling PAN party, affirmed that view, stating, “The Mexican government has no intention to legalizing casinos. We will crack down.’’

   Even so, officials for the rival PRI party maintain that legalization is still in the cards. PRI, the once-undisputed political power in Mexico, has rebounded in recent polls and is considered a formidable rival to Fox’s PAN in upcoming elections.

   Sources say one possible scenario would be a bill permitting Mexican states to draw up their own casino regulations. But others rate this prospect a long-shot in a country that strives for — but seldom achieves — central control.

            Stay tuned.