A recently approved major reform of the Regulations of the Federal Gaming and Sweepstakes Law states that slot machines at land-based casinos will not be allowed after the expiration of the permits nor will any new permits be granted. Let’s go through the main points surrounding this reform and how it may impact the online sportsbook industry.
New Interpretation of the Law
On November 17th, 2023, the gambling landscape in Mexico changed drastically. The new regulation will essentially eliminate land-based slots once those permits expire without any hope of renewal, nor will new permits be allowed. The retail casinos and gambling halls will ostensibly be limited to table games and non-slot gaming.
Articles 137 Bis, 137 Ter, and 137 Quater of the Federal Gaming and Sweepstakes Law that allow “drawings of numbers or symbols through machines” will be revoked. Furthermore, the duration of the licenses which have traditionally spanned 25 years will be reduced to 15 years if, indeed, there are any takers.
Slot machines in Mexico generate over $874 million with nearly $274 million being earmarked to Mexico’s public treasury according to a column written by El Universal journalist Mario Maldonado.
“The only mercy that Luisa María Alcalde and López Obrador would have with this industry is that the rights of the casinos would be respected until the expiration of their permit,” said Maldonado.
Miguel Angel Ochoa, President of AIEJA (Association of Permit Holders, Operators and Suppliers of the Entertainment and Gambling Industry in Mexico), spoke about the recent events saying, “Although at the moment it does not prohibit slot machines, it practically prohibits the opening of new halls in the country and this implies that there could be no more gaming halls in the future. If this catastrophic horizon were to materialize, there would effectively be no more machines, nor live gaming tables.”
Online Casinos Benefit
It is estimated that over 17% of Mexican residents have access to the online gaming market but that number is expected to soar with the decimation of retail slot parlors. However, the number of online casino customers in Mexico is expected to reach 31.7 million people in 2028.
Roberto Müller, CFO of the online casino Playdoit, commented, “The expectations for growth in this sector are very high, it is expected that in the coming years, there will be a growth in the number of users, thanks to the fact that there are more and more options for betting and also due to the growing interest of women in sports betting.”
“From wherever we look at it, online casinos have great opportunities for growth in Mexico in the coming years, but it is important that there continue to be clear rules to attract new investments to the country,” Verdejo added.
Verdejo estimated that gambling revenues in 2023 are estimated at $2.39 billion and were expected to reach $3.49 billion in 2027. But after the announcement and with the current law in place, that number could hit $4.63 billion.
A manager of Strendus online casino said, “The advantage of being an online casino is that these provisions would not be affecting us, in such a way that the possibilities for growth are very great, we even foresee that new competitors will enter given the complicated conditions that physical casinos are facing.”
Calculators
