Mexico’s New Reform Seeks to Ban Slot Machines

President Andrés Manuel López Obrador has proposed new legislation aimed at banning all slot machines in casinos across Mexico. If this reform goes through, it could have significant implications for the country’s gambling industry.

The Legal Journey

The federal government is preparing to reform the existing regulations surrounding casino operations, particularly affecting slot machines. This legislation was previously endorsed during former president Felipe Calderón’s administration and received unanimous support from the Supreme Court of Justice in 2016.

The new draft, published by the Ministry of the Interior, aims to eliminate “draws of numbers or symbols through machines,” a direct nod to the controversy surrounding slot machines.

Identifying Loopholes

Obrador has raised concerns claiming many casinos obtained their operating licenses through dubious means while Calderón was in power. Despite the new legal framework, local governments continue to permit the opening of new casinos, which Obrador has deemed illegal.

According to government interpretations, the Directorate of Games and Sweepstakes (under the Ministry of the Interior) is the sole authority assigned to grant casino permits, rendering municipal licensing unnecessary.

This ongoing review of licenses has already started to shrink Mexico’s casino market, but the government acknowledges that it has yet to fully curtail the emergence of new casinos.

To substantiate the proposed ban, the government asserts that slot machines are categorized as illegal under the current Regulations of the Federal Law on Games and Sweepstakes (RFLGS), which exclusively permits games like dominoes, chess, bowling, and raffles. Notably, there haven’t been any amendments to this law since 1947.

The Impact on Current Casinos

This provision extends to an additional 408 casinos that are not yet operational; those intending to commence operations will need to do so without any slot machines.

The Rise of Online Gaming

As land-based casinos face challenges, online gaming is thriving. Statistics reveal that Mexico is among the countries with the highest daily traffic on online gambling platforms.

Data from the International Gambling Report highlights that over 60% of online bettors in Mexico prefer digital platforms over traditional casinos. Popular options include sports betting, lotteries, instant lotteries, slot machines, and roulette.

These insights suggest a notable shift towards online gaming, even as the regulatory framework around it remains less stringent than that of land-based operations. According to government reports, a staggering 50% of online gaming platforms function outside the jurisdiction of the National Directorate of Games and Sweepstakes.

Looking Ahead

The impending changes proposed by the López Obrador administration may place both parts of the Mexican gaming industry—land-based and iGaming—at a crossroads. If the slot machine ban materialises and further regulations tighten, both operators and players will need to adjust to these evolving conditions.

Key Points to Remember:

• President Obrador advocates for a full ban on slot machines in Mexican casinos.
• The ban builds on criticisms of the licensing process for casinos during previous administrations.
• Existing casinos could retain their slot machines but only while current permits are valid.
• The online gaming sector continues to grow, with many users favouring digital platforms over physical casinos.
• Over 50% of online gaming sites may operate without proper regulation in Mexico.

In summary, Mexico’s proposed ban on slot machines reflects a broader reevaluation of gambling regulations in the country. With increased scrutiny on licensing and a continually evolving online gaming landscape, stakeholders in both sectors must prepare for the potential impacts of these reforms.