Constitutional Concerns and Industry Frustration Over Mexican Gambling Decree

In a bold move, Mexican President Andrés Manuel López Obrador recently signed a decree that significantly amends the country’s 2004 gambling regulations. The law, effective from November 17, essentially prohibits slot machines and other casino games in gaming halls, prompting frustration and legal challenges from industry officials and gambling lawyers in Mexico.

Legal Challenges to the Decree’s Constitutionality

Legal experts are contesting the decree, labeling it unconstitutional and critiquing the changes made to Mexico’s gambling regulations. Carlos Portilla Robertson, a partner at Portilla, Ruy-Diaz & Aguilar, has criticized the decree for its errors and lack of industry understanding. He raises concerns about potential job losses, with over 450 establishments and thousands of formal jobs at risk. Miguel Ángel Ochoa Sánchez, president of AIEJA, also underscores the substantial job contributions from the industry, with both legal and industry representatives questioning the decree’s constitutionality.

The Decree’s Specifics and Its Impact on the Industry

The decree targets the “drawing of numbers or symbols through machines,” effectively banning slot machines and similar casino games. While current licenses remain unaffected, new permits for casino gaming cannot be issued, and existing permit-holders cannot continue offering these games upon license renewal. However, no permits are due for renewal for at least five years. The Ministry of the Interior (Segob) claims that these regulatory changes aim to provide legal clarity and address gambling addiction concerns. Yet, legal experts argue that such games are permissible under Mexican federal law, and the public consultation feedback on the draft resolution was reportedly ignored.

Future Implications for Casinos and Gaming Sector

The decree signifies a significant shift for slot machines and casinos. The federal government plans to halt issuing new licenses for businesses with slot machines, and current permits will not be renewed. The new rules also state that tickets for cross-betting activities will be valid for a minimum of one year and a maximum of fifteen years. This regulatory change contradicts the 2016 Supreme Court of Justice of the Nation’s classification of slot machines as “sweepstakes.” It challenges the legalization of gambling machines by Felipe Calderón’s administration seven years prior. The Ministry of the Interior argues against slot machines, citing risks like corruption of minors and links to organized crime.

An Uncertain Future for Mexico’s Gambling Industry

The recent decree has left the Mexican gambling industry in flux. Legal challenges are mounting, and industry stakeholders are advocating for a more balanced approach that considers both regulatory concerns and the economic importance of the gambling sector. As the industry faces these sweeping changes, its future remains uncertain, with significant implications for casinos and the broader gaming sector in Mexico.