Mexico's gaming industry battles government over recent slot machine ban
Two weeks after Mexico's president announced a ban on slot machines in casinos and arcades, gaming industry officials are preparing to fight back. They are preparing to overcome legal challenges and defend their businesses in what is likely to be a lengthy legal battle.
Miguel Ángel Ochoa, president of the Mexican Association of Amusement and Gaming Licensees, Operators and Suppliers (Aieja, by its Spanish acronym), laid out some battle plans this week. He told local media that the defense strategy would address two areas: protecting industry interests and advocating for changes to federal gaming and competition laws.
On November 16, the federal government published a decree in the Official Gazette of the Federation (DOF) halting the issuance of new licenses and not renewing existing licenses to operate “slot machines.” Aija believes that unilateral decisions will weaken the regulated gambling industry and the state.
Slot machines mean a lot of money
Slot machines account for 85% of the industry’s business. The restrictions imposed could result in a huge revenue loss of MXN 12 billion ($700.32 million) for the current federal government.
One notable criticism from the gaming industry revolves around the National Commission for Regulatory Improvement (Conamer, by its Spanish abbreviation). Despite public consultations taking place in the months leading up to the announcement, the decision was ultimately made to ignore industry input.
Ochoa therefore confirmed that Aieja would take legal action to prevent the business from collapsing in the medium term. The looming impact could be particularly severe for most casinos, whose licenses are set to expire between 2028 and 2033. Full restrictions on slot machine license renewals are planned for 2038.
Aieja stressed that Mexico’s federal laws regarding gaming and sweepstakes have not changed significantly in about 80 years. They believe it would be wisest to first update the country's gambling laws rather than knee-jerk to eliminate slot machines.
The death knell of casino employment
In evaluating the proposed regulations, casino operators expressed concern that the measures would not only limit gaming opportunities but could also deter patrons from entering these entertainment centers. They even highlighted feedback from industrial workers who expressed concern about the uncertain fate of their employment.
The country's 429 casinos have created 180,000 direct and indirect jobs, and more than 100,000 jobs will be at risk in the next six years. There are also warnings that companies that make slot machines may pull out of investments in Mexico.
Ochoa emphasized that the gaming industry is in ongoing dialogue with the Interior Department and lawmakers. Aieja hopes to begin discussions on new regulations during the last session of this Congress in February next year.
The aim is to create an environment that takes into account industry concerns and takes a balanced approach to meeting regulatory requirements and the sustainability of companies within the industry.
a ray of hope
President Andres Manuel Lopez Obrador is unlikely to change his mind. But there is a potential lifeline for Mexico’s gambling industry. Mexico's president has a six-year term, and Lopez Obrador will step down next year.
This opens the door for a new president to emerge. Currently, the most likely candidate is former Mexico City mayor and Obrador ally Claudia Sheinbaum. While she's not a staunch supporter of gambling, she's not an enemy of the industry either.
As mayor of Mexico City, Scheinbaum led a reform aimed at stabilizing the taxes paid by gambling operators. She acknowledged the industry's contribution to government, which could help drum up support for Aieja.
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Source: www.casino.org
