Mexico’s gambling decree sparks industry outcry and constitutional concerns

Shirley Pulis Xerxen 4 months ago
Mexico’s gambling decree sparks industry outcry and constitutional concerns

In a ground-breaking move, Mexican President Andrés Manuel López Obrador recently signed a presidential decree that significantly alters the country’s 2004 gambling regulations. Mexico’s gambling decree, effective from November 17, appears to ban slot machines and other casino games in gaming halls, eliciting frustration and legal challenges from Mexican gambling lawyers and industry officials.

Constitutional Concerns and Industry Frustration

Mexican President Andrés Manuel López Obrador
Mexican President Andrés Manuel López Obrador.

Legal experts argue that the decree is unconstitutional, challenging the changes made to Mexico’s gambling regulations. Carlos Portilla Robertson, a partner at the law firm Portilla, Ruy-Diaz & Aguilar, criticized the poorly prepared and error-ridden decree, emphasizing the lack of understanding about the industry among those who drafted it. Portilla expressed concerns about potential job losses, estimating that over 450 establishments and thousands of formal jobs could be at risk.

Miguel Ángel Ochoa Sánchez, president of AIEJA (the association representing entertainment and gambling operators in Mexico), echoed these concerns, highlighting the significant job contributions of licensees, operators, and manufacturers in the industry. Both legal experts and industry representatives question the constitutionality of the decree, signaling a collective effort to challenge its validity.

Decree Details and Industry Impact

The decree specifically targets the “drawing of numbers or symbols through machines,” effectively eliminating slot machines and similar casino-style games. While existing licenses are not affected, new permits for casino gaming cannot be issued, and current permit-holders cannot continue offering games once their licenses are renewed. Notably, no permits are up for renewal for at least five years.

The Ministry of the Interior (Segob) argues that the regulatory changes aim to provide legal clarity, citing potential savings in treating gambling addiction. However, legal experts counter this logic, stating that such games fall within permissible categories under Mexican federal law. Concerns raised during a public consultation on the draft resolution were allegedly ignored, contributing to the frustration within the industry.

Future Implications for Casinos and Gaming

The impact of the decree on slot machines and casinos is significant. The federal government’s decision suggests a halt to issuing new licenses for businesses with slot machines, and current permits will not be renewed. Permits for cross-betting activities in different spaces will be valid for a minimum of one year and a maximum of fifteen years, according to the new rules.

This regulatory shift comes seven years after Felipe Calderón’s administration legalized gambling machines, with the Supreme Court of Justice of the Nation classifying slot machines as “sweepstakes” in 2016. In contrast, the Ministry of the Interior argues that slot machines pose risks, including corruption of minors and ties to organized crime networks.

As the Mexican gambling industry grapples with the sweeping changes brought about by the recent decree, legal challenges and concerns about the constitutionality of the regulations continue to mount. The future of casinos and the broader gaming sector in Mexico is uncertain, with industry stakeholders closely monitoring developments and advocating for a more nuanced approach that addresses both regulatory concerns and the economic contributions of the gambling sector.

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