What does Mexico's new gaming and lottery decree mean?

President Andrés Manuel López Obrador approved a decree prohibiting raffles through slot machines, which came into effect on November 17. The modification was approved seven years after slot machines were legalized during Felipe Calderón's administration, when the Supreme Court of Justice of the Nation endorsed the use of slot machines in casinos, arguing that slot machines are considered a lottery game. and not by chance or skill.

According to Miguel Ángel Ochoa, President of the Association of Permit Holders, Operators and Suppliers of the Entertainment and Gaming Industry in Mexico (Aieja), slot machines are vital for casinos, since they represent 85% of the business.

He also highlighted that while the new measure may not have immediate effects, most casinos, whose permits expire between 2028 and 2033, will be affected in the next five years. Additionally, permits will not be renewed after 2038.

If the casinos exceed the validity period, they will have a maximum period of 15 years to stop their operations.

With this, Ochoa raised the possibility of slot machine manufacturers withdrawing their investments from the country, citing the perceived lack of future prospects in the business.

Risk of illegal casinos
Ochoa pointed to the risk of casino workers turning to the informal gaming industry as an alternative due to the perceived threat to their jobs. Illegal casinos are already widespread in Mexico, and the decision to ban slot machines in licensed casinos could aggravate the situation and lead to more crime-related problems.

An incident of this type occurred recently, on November 22, 2023, in Tijuana, Baja California, where a commercial establishment suspected of operating as an illegal casino became the scene of an arson and homicide investigation.

Uncertain future
If this continues, residents may have no choice but to gamble abroad through online casinos. Nowadays, there are many online casinos, such as sportbits casino, that cater to foreigners and offer alternative payment methods, such as bitcoin.

Ochoa stated that the industry is preparing legal resources to defend its activities, planning to confront the measure with two different strategies. As slot machines constitute an important part of their business, they intend to challenge the new regulation through an appeal for protection, according to the news portal El CEO.

"At this moment, the two actions are the issue of Amparo, on the one hand; and the issue of the promotion of a Federal Law on Games and Sweepstakes," he explained.

Gaming industry players are seeking to reach an agreement to modify the Federal Gaming and Sweepstakes Law, which dates back to 1947. Ochoa highlighted the obsolescence of the current law, considering the lack of provisions for gaming machines, the Internet and cellphones.

He mentioned that permanent communication with the Ministry of the Interior and legislators to discuss a new regulation, ideally for February 2024, during the last session of the current Congress.

"I believe that if we achieve a new Federal Gaming Law that provides certainty and tranquility, we will surely not have a problem. If not, we have the protections that will allow us to negotiate the renewal of permits," Ochoa added.