Mexico is preparing to authorize the construction of casinos in popular tourist resorts, including Acapulco, Baja California and the Mayan Riviera. The country’s Interior Ministry said in a press conference last week that the idea was to keep new casinos from springing up in urban areas, where they’re more likely to rely on a local clientele.
The number of new casinos that will be permitted in resorts has yet to be determined. There are currently 297 gambling venues in Mexico and, using a formula based on the number of permits issued by previous federal governments, the new project could result in as many as 775 casinos being developed in resorts popular with affluent tourists.
Hotel chains including the Hard Rock Riviera Maya and Resort Mundo Imperial Acapulco have already confirmed their interest in adding live casino gambling to the list of amenities they can offer their guests. The head of the Mexican Association of Professional Real Estate Agents said certain unnamed “Las Vegas-based firms” had already expressed interest in setting up shop at resort properties in Cancun.
In December, the US State Department updated its travel advisory for Mexico, urging travelers to avoid obvious displays of wealth and to consider the danger of patronizing “casinos, sports books, or other gambling establishments and adult entertainment establishments.” The new plan would allow tourists to get their gamble on without having to leave the safety of their resort.
Mexico is currently in the process of passing its new Federal Betting and Raffles Law. The bill was approved by the House of Representatives in December and will be discussed in the Senate later this month. Maria Marcela González Salas, the Director General of Gaming and Raffles, said there is still time to amend the bill to include the resort casino project.
BRINGING ORDER FROM CHAOS
The new legislation is an attempt by Mexico’s new federal government to exert some control over the country’s chaotic casino industry. The legislation will require current casino licensees to reapply for licensing, which the head of the country’s gaming association has warned could spark a flurry of court challenges if many of these operators are denied new licenses.
Last May, federal authorities took action against several casinos operated by Entretenimiento De Mexico (EMEX), including the Playboy Club in Cancun. The authorities said EMEX had failed to legally establish the legitimacy of its operations. In 2013, Mexico reduced casino license terms from 40 to 25 years and revoked the ability of casino licensees to pass licenses on to other operators.
In January, Carlos Carrion, local committee president of the Association of Gaming Equipment Manufacturers (AGEM), estimated that 15% of the 90k electronic gaming machines (EGM) currently operating in Mexico were utilizing unlicensed software. Carrion said Mexico lacks certification standards for imported gaming equipment, leading to a flourishing black market of second-hand EGM, which can cost up to 50% less than new machines. AGEM says Mexico’s EGM generate annual revenue of $1.6b.