Mexican Gaming Entrepreneurs Challenge Slot Machine Decree with Protective Measures

The Mexican gaming industry has rallied against the recent slot machine permit decree, unveiling bold protective measures to safeguard their businesses. In response to the government’s proclamation that no new permits will be issued, and existing ones will not be renewed, entrepreneurs are strategizing their resistance. Miguel Ángel Ochoa, President of the Association of Permit Holders, Operators, and Suppliers of the Entertainment and Gambling Industry in Mexico (Aieja), revealed their dual-pronged approach. They are simultaneously pursuing protective actions while pushing for a new Federal Law on Games and Sweepstakes to ensure long-term stability for the industry.

In the wake of the Mexican government’s decree that has sent shockwaves through the gaming industry, Mexican gaming entrepreneurs have come forward with resolute strategies to counter the impact. The decree, published on November 16 in the Official Gazette of the Federation (DOF), outlined a policy that prohibits the issuance of new permits for gambling slot machine establishments and refuses to renew licenses for those currently in operation. This seismic shift has prompted business leaders, particularly within the gaming sector, to take a stand.

Miguel Ángel Ochoa, President of the Association of Permit Holders, Operators, and Suppliers of the Entertainment and Gambling Industry in Mexico (Aieja), has emerged as a vocal advocate for the industry. In an interview with El CEO, Ochoa detailed their two-fold approach to confront this challenge head-on.

“At this moment, the two actions are: the issue of protection, on the one hand; and the issue of promoting a Federal Law on Games and Sweepstakes,” stated Ochoa.

The objective is clear: the gaming entrepreneurs aim to mitigate the immediate consequences of the decree through protective measures while simultaneously advocating for a new Federal Law on Games and Sweepstakes that would provide much-needed certainty and stability to the industry.

The significance of this endeavor cannot be overstated, as slot machines represent a colossal 85 percent of the gaming business in Mexico. Faced with the prospect of restrictions on this scale, industry leaders are determined to defend their livelihoods through protective actions.

One of the industry’s key grievances with the recent regulatory changes is that despite the government’s claims of engaging in a public consultation process, the National Commission for Regulatory Improvement (Conamer) seemingly disregarded their feedback.

Ochoa highlighted that while the immediate impact of the decree might not be readily apparent, its repercussions will become increasingly pronounced over the next five years. The majority of casinos will face adverse effects as their permits, set to expire between 2028 and 2033, will not be renewed. Beyond this timeframe, no permits will be renewed after 2038.

Critics within the gaming industry have voiced concerns that these measures will limit gaming options, potentially driving customers away from gaming centers. The risk of employees seeking employment in the informal gaming industry is also a genuine worry.

Furthermore, slot machine manufacturers are expected to withdraw investments from Mexico, anticipating a bleak future for their businesses in the wake of the regulatory overhaul.

In light of these dire prospects, the gaming and sweepstakes industries are determined to seek an agreement to revise the Federal Law that governs their sector. Ochoa underscored the urgency of modernizing the regulatory framework: “The Law in force is from 1947. At that time there were no gaming machines, there was no internet, there were no cell phones. So, the regulations, these modifications are working on a really obsolete law. The intention is to work on a new bill.”

He also noted that the industry has actively engaged with the Ministry of the Interior and legislators to initiate discussions on new regulations, commencing in February 2024, during the final session of the current Congress. This collaborative effort signifies a crucial step forward in reshaping the future of the gaming industry in Mexico.