This article is from the June 1996 The Mexico File
Back to Articles List
Casinos May Return to Mexico
Casinos were outlawed in Mexico during the presidential term of Laaaro Cardenas from 1934-1940. He Claimed they promoted crime and vice. Now it looks as if this policy may be reversed in the near filture. Despite opposition from church groups and some leffist political groups, there is a good chance that legislation to legalize casino gambling could be introduced in Congress next fall. The Mexican government recently commissioned a study by a Canadian tourism consulting firm that estimated that gambling would generate as much as $1.2 billion US in tourism annually and create 25,000 to 50,000 new jobs. And although tourism is presently Mexico's third largest industry, it has slowed in recent years due to political instability and competition from the Caribbean.
Mexican officials have been touring the United States, the Caribbean and Europe to look at casino operations that could be used as models for Mexico. One possibility mentioned would be to create casinos that are like social centers with areas for family gatherings alongside gaming tables. The most likely cities under consideration for gambling are the Pacific resorts of Acapulco, Puerto Vallarta, Cabo San Lucas and Mazatlan. Also probable are Mexico City, Cancun, and the border cities of Juarez and Tijuana. The obvious benefits to the country would be in the creation of many jobs, increased tourism, and substantial investment dollars. These are convincing arguments for a country that has undergone an unprecedented economic crisis in the last two years. The obvious risk is that the drug lords will become involved and have yet another tool for money laundering. This could dissuade some of the large forcigri companies (Harrah's, Bally's, etc.) from entering the market. They would have to be convinced that they could operate in a legitimate manner, on a level playing field, and not be sucked dry by Mexican bureaucracy and newly created taxes.
As legalized gambling has become more accepted throughout the world, it would be hard to imagine that Mexico won't play their hand in the near fliture. To fold and sit on the sidelines could be a serious economic opportunity lost. We'll let you know how this progresses. D.S.