Mexico May Place Bets on Casinos

LA PAZ, Mexico – As reported by the Washington Post: “Back in the days of Prohibition in the United States, Mexican casinos were the playground of choice for Al Capone and others looking for cheap and legal booze, floozies, cards and dice. By 1938 Mexico was so fed up that casinos were banished by a presidential decree that stands to this day.


“But now an old law is confronting a new reality: The economy is sagging, tourism needs a boost, casinos are cash factories and President Vicente Fox is a pragmatic businessman who likes the sound of billions-with-a-b.


“So casinos are suddenly playing good odds. Despite continued opposition from church leaders and law enforcers, analysts here said, the political and economic climate is right for the Mexican Congress to legalize casinos, possibly by the end of the year.


“…`A casino wouldn’t be our salvation, but it would be the perfect complement to our development. It would be oxygen,’ said Mayor Victor Guluarte, looking out over La Paz Bay to a spit of land where he envisions a casino anchoring a big development with hotels, restaurants and a marina.


“…All over Mexico, officials are doing the same math. Federal studies estimate that building a dozen casinos could bring in $200 million in new private investment and $500 million a year in new tax revenue. One recent privately commissioned study estimated that opening UFABet casinos could generate $3 billion a year in tourism and create almost 100,000 new jobs a year. Tourist industry associations have taken out full-page newspaper ads urging Mexico to take advantage of that opportunity.


“With the Mexican economy hurt by the downturn in the United States, analysts said casinos may be too attractive for even the doubters in Congress to turn down. The government desperately needs money for schools, roads, health programs and other services in a nation where half the population lives in poverty.


“…Some of that money would probably come from wealthy Mexicans who now spend it elsewhere. Kevin Bagger, senior research analyst at the Las Vegas Convention and Visitors Authority, said Mexico is his city’s second-largest source of foreign visitors, behind Canada.


“Bagger said 231,000 people flew to Las Vegas from Mexico in 2000 and spent an estimated $164 million on things such as hotels and food — and that is not counting the millions they spent gambling.


“…Those figures are not lost on major Las Vegas casino operators such as MGM Mirage, Park Place Entertainment Corp. and other U.S. corporations that would be interested in investing in Mexico, said Washington-based business consultant James R. Jones. Jones represents Sol Kerzner, a South African-born entrepreneur who owns casinos in the Bahamas and Connecticut and who developed the Sun City resort in apartheid-era South Africa.


“…Mexico has issued special permits to allow legal horse racing, dog racing and more than 110 betting parlors that accept wagers mainly on sporting events. Most analysts agreed that there are also probably 1,500 or more illegal gambling operations in Mexico including everything from cards to roulette wheels to cockfights, and the government is getting no benefit from them.


“…Under the legislation being considered, casinos would be built by private investors and their profits would be taxed at 9 percent, 3 percent each for the federal, state and local governments. If the law passes, analysts said, an initial round of 10 or 12 casinos would probably be allowed…”