Mexico's Gambling Sector Faces Major Overhaul as Slot Machines Face Ban

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On September 7, Mexico’s Secretariat of the Interior plunged the nation’s gambling sector into uncertainty, drafting a decree aimed at transforming and overturning certain provisions in the Federal Gaming and Sweepstakes Law. Bearing the unmistakable signature of President Andrés Manuel López Obrador, the proposed legislation has been introduced to the National Commission for Regulatory Improvement and is forecast to come into effect soon.

The proposed changes strike at the heart of the industry. One remarkable development is the complete eradication of the hitherto profitable slot machine industry within Mexico’s borders. Alongside this, the decree will see the period of casino permits reduced drastically.

Specifically, the overhaul implies the repeal of Articles 137 Bis, 137 Ter and 137 Quater of current regulation, all of which sanction number and symbol drawing via machines, otherwise popularly known as slot machines. In effect, this means that current permits for operating such machinery will be rendered obsolete, effectuating a total prohibition.

Additionally, Article 33, which dictates the lifespan of a casino’s permit, also comes under the knife. While the current lifespan is capped at 25 years, it is expected to be trimmed down to just 15 years in the wake of future changes.

Commentator Mario Maldonado, writing in El Universal, pointed out the far-reaching economic ramifications of such a decision. Slot machines contribute a yearly turnover of MXN 15,000 Million ($874,317,000) for the operators. Plus, they inject roughly MXN 4,700 million ($273,952,660) into the public coffer, an income stream that would dry out following the proposed changes.

“The only concession Luisa María Alcalde and López Obrador will make to this industry is that current casinos will retain their rights till the expiry of their permits,” stated Maldonado.

Renowned gambling houses will feel the impact. Caliente, the brainchild of Jorge Hank Rhon, Play City, owned by Emilio Azcárraga and Codere, the brainchild of Gonzaga Higuero take the lion’s share of the blow.