Mexico’s Secretariat of the Interior to Ban Betting Machines

Mexico’s Secretariat of the Interior (Segob) is working on prohibiting bets or draws in any kind of machine, including slots, bingo, and card simulators.

Conditions of the bill:

On September 7, Segob released a draft decree that was submitted to the National Commission for Regulatory Improvement (Conamer). This decree will prohibit any games that are subjected to chances.

However, all of the 444 casinos that currently operate in Mexico will be allowed to keep new machines until their licenses expire, and the new ones won’t be issued. However, there are 408 additional licenses that are issued to the casinos that don’t operate at the moment. They won’t be able to operate the machines as well.

According to the Government, the Federal Law of Games and Drawings prohibits the game of chance. However, the law that doesn’t allow slot machines hasn’t changed since 1947, when machines were legalized by former President Felipe Calderón and endorsed by the Supreme Court of Justice. 

In the bill is written: “The Mexican State has the responsibility to safeguard the rights of people in vulnerable conditions, avoiding the potentially harmful effects of gambling that may have an impact on children, adolescents, the country’s youth and senior citizens, as well as the damage that may be caused to people with mental or psychosocial disabilities or those who suffer from any disease or addiction, such as compulsive gambling or a gambling disorder.”

Segob also wants to eliminate all operators from the gambling scene since they can acquire the machines via various third parties by allowing them to become “sub-permittees.”

Disagreements and impact on the country:

The Association of Permit Holders, Operators, and Suppliers of the Entertainment and Gaming Industry (AIEJA) disagrees with the decision. Their main concern is the revenue decrease, which can go up to 90%, and the Special Tax on Production and Services (IEPS) will be greatly affected by that. On top of that, the gaming halls might end up closed, which will cause many people to get laid off. Only in the gambling industry, there are about 50.000 direct jobs and up to 120.000 indirect ones, as Yogonet reports. 

Alfonso Pérez Lizaur, head of the Association of Permit Holders and Suppliers of Games and Sweepstakes, compared the new situation on the market with “watching television in black and white.” He added: “The participation of players in the gaming halls would decrease drastically since the entertainment offer would be seriously affected. Thousands of sources of direct and indirect jobs would be lost, as well as large amounts of contributions to the treasury and federal entities.”

But according to the Ministry of Finance and Public Credit (SHCP), the Special Tax on Production and Services (IEPS) on games and sweepstakes was only 1% of all income that the country generated on this tax. The local taxes will be greatly affected, though, since, at the moment, all licensees and casinos are obligated to pay installation and operation taxes.