An international investment dispute panel has sided with a group of U.S. investors in their fight with Mexico’s government over the forced closure of a local casino business.
Last Friday, the World Bank’s International Centre for Settlement of Investment Disputes (ICISID) issued a ruling that will allow a group of U.S. investors to pursue a claim for compensation against the Mexican government over the April 2014 closure of a local casino business.
The 38 investors who brought the claim have accused Mexico of violating the North American Free Trade Agreement (since rechristened by U.S. President Donald Trump as the United States Mexico Canada Agreement). Friday’s ruling was largely a procedural victory, in that Mexico had objected on jurisdictional grounds, but the ICISID panel also awarded the U.S. investors $1.4m in court costs.
The five casinos in question once belonged to Entretenimiento De Mexico (EMEX), but their license to operate was revoked by Mexico’s SEGOB regulatory body in 2013. The U.S. investors had taken over the casino operations in 2009 and were granted their own gaming license in 2012.
After the casinos’ closure, the U.S. investors attempted to convince SEGOB to allow them to re-open the venues with the help of Mexican partners. The investors claimed that SEGOB told these Mexican companies that the casinos couldn’t be re-opened “if the ‘gringos’ remained involved.” The U.S. investors accused the local courts who upheld the casino closures of being “politically motivated and influenced.”
The trade claim has been going on since 2014, and it’s unlikely that the impasse will be resolved anytime soon. That is, unless the Orange Julius in the White House decides to fold this dispute into his perpetual demonization campaign of everything and everyone located south of the border, down Mexico way.
In other Mexico casino news, a federal judge recently sentenced Óscar Omar Treviño Morales, a former leader of the infamous Los Zetas drug cartel, to 18 years in prison on money laundering and weapons charges. Morales was suspected of being responsible for the 2011 firebombing of the Casino Royale in Monterrey that killed 52 people after the venue’s owners refused to pay protection money to the cartel.
