Mexico’s expanding casino industry just came to an abrupt stop

Any new casino operator hoping to grab a piece of the action in Mexico is going to have to put its plans on the back burner for now. The gambling landscape in the country is changing quickly this year, with new tax guidance issued this past June that stands to test operators’ resilience to maintain a presence in the country. In addition, President Manuel López Obrador has just passed down an order to halt the approval of new casino license applications while launching an investigation into how previous licenses may have been illegally awarded.

According to Obrador, there are doubts about how one of his predecessors, former Mexican President Vicente Fox, led the licensing approval process while in office from December 1, 2000, to November 30, 2006. The current president believes that Fox may have created “inadequate” licensing policies, and wants Secretary of the Interior (SEGOB, for its Spanish acronym) Olga Sánchez Cordero to look into the matter. While the alleged inadequacies don’t appear to apply to all the casino licenses that were issued, no details about targeted license holders were provided.

States Obrador (translated from Spanish), “We are going to ‘clean up’ the government. We have a problem and we are going to solve it because we are coherent and persistent. We want no more casinos to open and no more permits to be granted. Some that began during Vicente Fox’s administration were not adequate. We are not going to grant such permits. Some licenses may have been issued but that is because we need to clean up the government and we have been doing that for a long time now, but we are not done yet. It is sometimes noted that for each authorized casino about seven million pesos [$316,890] are obtained.

“We would have to look into that. The Secretary of the Interior has to conduct an investigation and if these licenses have been wrongfully granted, they should be revoked.”

Mexico’s current leader is tough on crime and corruption and has repeatedly threatened to get rid of anyone caught gaming the system. There have already been several high-ranking individuals removed – some by force – from office this year, including José Elibier Perea Juárez. He is the former Deputy of Director of Inspections and Surveillance for the country’s Directorate of Games and Sweepstakes, and is alleged to have extorted as much as 100,000 pesos ($4,526) per week not to yank the license of some smaller gambling properties.

Obrador is determined to have a casinofree Mexico, despite the legitimate revenue the licensed operators provide, and states that only the federal government has the authorization, through the SEGOB, to issue any casino licenses. He asserts that any regional government that tries to enact legislation to circumvent his decisions will be dealt with by the Supreme Court and says, “If it is up to the federal government, we won’t allow new casinos. We still remember what happened when the so-called Gobierno del Cambio (the government of change) began authorizing casino openings and we will not fall for the same thing, it would be shameful to do the same.” He adds, “No casinos in this country. Citizens want a change.”

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