The sorry state of Mexico’s banking and telecom industries is holding back the country’s online gambling market, according to a leading market participant.
This week, Mexican financial news outlet El Financiero quoted Fernanda Sainz, managing director of online gambling operator Caliente Interactive, saying that attempts to “demystify” online gambling for Mexican punters are being hindered by their relative unfamiliarity with the product.
Speaking at this week’s inaugural Gaming Industry National Convention in Mexico City, Sainz bemoaned the fact that “less than half” of Mexicans with internet access also have access to a bank card.
Compounding matters, tech-savvy Mexicans often choose to bet with internationally licensed operators rather than the comparatively few gambling sites that have so far obtained local approval. Jorge Vélez, sports betting director for Spanish operator Codere’s Latin American business, said Mexican-licensed operators are forced to spend up to half their revenue on marketing just to get local punters’ attention.
Mexican-licensed operators must also pay 30% IEPS (excise tax) on their gambling revenue, which, when combined with their marketing outlay, means they can’t afford to offer rates competitive with the international sites.
Speaking on the sidelines of the convention, Mexican gaming law attorney Alfredo Lazcano told Yogonet that the local online gambling market could double in size if the government demonstrated a willingness to update the country’s 70-year-old gambling laws.
In 2014, the lower house of Mexico’s legislature approved a sweeping update to the 1947 Federal Betting & Raffles Act but the senate claimed it needed more time to study the issue. Three years later, the Senate still hasn’t pulled that trigger, and Lazcano claimed the government was missing out on hundreds of millions of dollars in gambling tax revenue as a result of this inaction.
Quoting stats provided by former Alderney Gambling Control Commission licensing director Michael Ellen, Lazcano claimed that Mexico’s online gambling market was worth $450m per year, and growing at an annual rate of 25%. However, only $50m of this market is generated by authorized operators.
LAND-BASED OPERATORS MORE POSITIVE
Land-based operators also expressed concern over the government’s notoriously chaotic management of the casino industry. El Economista quoted Miguel Ángel Ochoa, president of the country’s gaming industry association AIEJA, saying Chile was now second only to Argentina on the Latin American casino market charts, relegating Mexico to third place.
Ochoa noted that Mexico currently had about 321 licensed gaming venues, down from over 400 in 2013, before the government started clamping down on the issuing of casino permits. Ochoa said this purge had been a necessary evil, but now it was “time to grow” again. Ochoa said 2017 casino attendance figures were expected to come in around 4m, a whopping 42% increase over the 2.8m who visited casinos last year.