Tuesday, March 6, 2012
Not a sure bet yet: A story of the Mexican gambling industry
Because I expect gaming and gambling will merge more and more in the future and we have a lot of readers in Latin-America, we decided to write a small outline about the Mexican Gambling industry. The article was written by our friend Morten Geertsen
Pointing towards the clouds of the night, these and other lights come from the many casinos placed around Monterrey. Six months ago, I first realized the popularity of gambling in Mexico, when a friendly family took me home, after I had rented a room in one of Monterrey’s most dangerous areas. Several days a week, in the afternoon they would leave the house to go gamble, and come home late at night. Euphoric, noisy and with the tequila still hosting after-parties in their blood.
This family was neither poor or out of balance – but it belonged to the fortunate group of Mexican families, who found joy in gambling, appreciated its social aspects and functions in Mexico, and had the necessary resources to cultivate such a hobby.
Sometimes I’d join them. Follow them in their quest for fun and newfound gambling skills. Share the adventurous feeling of “going all in” on trying your luck! The loud sounds of living in that one moment – the present, where many Mexicans love to be – echoed days after each visit.
Then there was a recent article, backing up my experiences with facts – reading across this tiny 10” screen:
“In 2004, the Mexican Government liberalized gaming laws and issued 200 licenses to betting parlors, bingo halls and a few casinos. Most of these licenses were grabbed up by Mexican television behemoth Televisa. Online gaming was added to the roster of legalized Mexican gambling in 2007. Today, the Mexican market is second only to Brazil in Central/South American gaming revenues and is believed to be around the $3.5-$4 billion range.”
Some years ago my “new Mexican family” would not have been able to perform their now accustomed night activities. Despite its reputation as a “loose to rules” nation, in many aspects Mexico should be considered a highly conservative country. Therefore, thanks to a pressure of the Catholic Church and a fence of old traditions, gambling was kept on safe distance of the Mexican citizens for more than 50 years.
However, that ban has eroded slowly over the years and many forms of lotteries and sports betting have been tolerated for decades. In 2004 the on-ground gambling ban was removed, and in 2007 ban for online gambling suffered the same destiny.
Since then the Mexican market of gambling has followed a path of growth. It is now second only to Brazil. Casinos worth more than $500 million are believed to open Acapulco and Mazatlan. A minimum of four new services are planned along the Texas-Mexico border. Over 35 gaming sites are expected to come up within the countries boundaries. Many gambling companies of Las Vegas will be willing and keen to open up their casinos in the promising light of the future Mexican gambling market.
Online gambling should not be overlooked. American gambling enthusiasts will swear loudly and clench their fist towards the sky, if you ask them about the situation of online poker in America. That’s because it is illegal there. And this Mexican online gambling has benefited enormously from for several years.
Sometimes when looking closer at a situation, you notice some “but”s. These are apparent in this article as well.
There are still law restrictions in Mexico. Nowadays fewer licenses to run casinos are issued by the government. Also, though leading players of this industry want to set up their casinos in beautiful tourist locations like Acapulco and Cancun, the government of Mexico has to explicitly mention the exact locations where casinos would be given the required license to continue such activities.
This means that the Mexican gambling market does not actually reach its potential: “Mexico should be one of the top ranking countries in the gaming industry within Latin America and it is estimated that if it removed its ban on casinos the gambling industry could generate revenues of US$80 - US $120 billion. As a contrast the current estimated income based on the real gaming activities allowed is a comparatively meager US$4.6 billion,” a report reads.
Another restriction comes when we take a look at the American market again. A legalization of Internet poker in the United States would send earthquakes of bad economy predictions across the Mexican gambling market. As mentioned, the neighbor country provides the industry with huge earnings, and should legal American online poker become a reality, it will lose most, if not all, of their U.S. poker customers.
Finally, what should not be overlooked nor underestimated is the security situation. It’s no secret that Mexico is right now undergoing its most severe security crisis in living memory. During my time in Monterrey, my study buddies and I experienced this in many forms – robberies, threats and corruption is daily life. The reason for this can be traced back to decision of president, Filipe Calderón, who initiated a violent war on the drug cartels. As a result the fights have gotten out of control, and the country’s image, people and economy is now shaken. The many illegal casinos are believed to be vulnerable to corruption, money laundering and extortion.
In the end, in the instability of the government and the corrupted dark corners of the illegal casinos, makes believing in Mexican gambling a “not sure bet”. However, despite some serious problems, Mexico shows signs of emerging as one of the world’s major gaming market. After all, with all the changes around the world restricting gambling, Mexico presents growing opportunities for investors, operators and equipment and technology suppliers within the gambling industry.