Mexico pressured to lift casino ban - Tuesday 12th of April 2005

If a group of Mexican businessmen and supportive lawmakers have their way, you may soon be able to add a trip to the craps table or roulette wheel to your next Mexican vacation.

Supporters of a measure to lift Mexico's 70-year ban on casinos are hustling to push the legislation through Congress before the current session ends April 30.

If passed, legal casinos could sprout up in Cancun, along the U.S. border and in a dozen other cities such as Acapulco and Monterrey.
Proponents say casinos are needed to keep Mexico's tourism industry competitive with destinations such as Puerto Rico, the Bahamas and Costa Rica, which allow casinos. Among major countries in Latin America, only Mexico and Brazil outlaw resort casinos.

"We can't stop being competitive," said Congressman Francisco Lopez Mena, who heads the Mexican House of Deputies Tourism Commission, which passed the proposed legislation on Wednesday. "All of the countries that we compete with have casinos; this is an activity of people on vacation."

Supporters say a proposed 12 percent tax on casino revenue would bring about $500 million per year in badly needed funds, generate thousands of jobs and capture the millions that Mexicans currently spend each year in casinos outside the country.

But the initiative faces stiff opposition from a coalition including the Catholic Church and a variety of citizen groups, who say casinos will fuel domestic gambling addiction and will be used by the country's powerful drug cartels to launder vast sums of money.

"This has nothing to do with tourism," said Daniel Olivares of the 8-year-old group Say No to Casinos, which has fought casino legislation for several years. "That's just a pretext. What they really want is the Mexican society to play. Their market is Mexico."

The group also worries that U.S. casino operators, which have been eager for years to enter the untapped Mexican market, will monopolize the industry and take profits - and Mexican income - out of the country. Supporters point out that the proposed law requires at least 50 percent of investment capital to come from Mexican sources.

But what may worry opponents most are fears that casinos will provide a fertile home for underworld characters.

"Mexico is different than other countries," Olivares said. "It's more dangerous because of the problems we have with narcotrafficking. The fundamental point is that what (traffickers) are looking for in casinos is the most efficient instrument to launder money."

The proposed legislation seeks to inhibit money laundering by requiring investors to prove the source of their money is legitimate and gamblers to report transactions above a certain amount, possibly $10,000.

Supporters have been pushing the legalization of casinos for about 10 years, but so far have seen every attempt stymied. Dozens of studies on the impact of casinos, justifying a whole spectrum of opinions, have been produced. The Autonomous University of Mexico recently offered to complete what officials said could be the definitive study on the subject, but Mexico's congress denied the offer, citing its $280,000 cost.

"We already have 10 years of studies," Mena said. "This is a very good law. It's necessary."

The legislation has to clear two more committees, and lawmakers admit they will have to hurry to put it to a congressional vote before the current session ends April 30.

Mexico allows some limited forms of gambling already: There are several dozen sports books throughout the country as well as a handful of horse race tracks.

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