Is Online Gambling in Mexico Here to Stay?

European I-gaming giant bwin recently gained footing in Mexico by securing a license for online sports betting in the country, but the project has quickly become the object of dispute.

Mexican newspaper La Jornada reported June 23 that the company's, bwin Mexico venture has ties to several shareholders in professional football teams and Mexican TV station Televisa, thereby constituting a conflict of interest.

Through special authorization approved Dec. 22, 2005 by the General Direction of Games and Draws of SG in Mexico, bwin Mexico (at the time called BetandWin Mexico), received permission to operate in the country under the license of gaming company Promojuegos de Mexico S.A. de C.V.

Granted on May 18, 2005 and valid until 2030, the permit includes temporary provisions giving the company permission to establish 10 remote betting businesses and 10 lottery businesses.

The license is legitimate, but opponents to gambling claim that the authorization was ultimately a means of appeasing supporters of newly elected Mexican President Felipe Calderón's conservative National Action Party.

Connecting the Dots

Daniel Olivares Villagómez, president of the social lobbyist group Di No a los Casinos (Say No to Casinos), told La Jornada that Promojuegos' major shareholder, Raúl Quintana Fernández, is connected to Emilio Azcárraga Jean Televisa. The station represents private investment firm Groupo Pegaso, which is headed by Alejandro Burillo Azcárraga, the cousin of Azcárraga Jean, president of the National Team Commission of the Mexican Football Federation (Femexfut) and organizer of stadiums and teams in the several states.

Villagomez added that Calderón, who came into power after very narrowly defeating his leftist opponent, Andrés Manuel Lopez Obrado, on July 6, essentially bought Femexfut's support by granting the license.

A Source of Contention

Barnard Thompson, the editor of MexiData.info and a consultant with over 45 years experience in Mexican and Latin American policy, points out that gaming has always been a source of contention within the Mexican government. Nevertheless, he says, bwin is operating legally in accordance with Promojuegos' permit.

He also suggests that the claims in La Jornada are indicative of the publication's historically leftist position.

"I think it was a political shot by La Jornada and an opportunity to back Obrador," Thompson said.

Shaky Ground

Promojuegos' permit includes a caveat that the modifications and adjustments to the present permit originate from constitutional resolution 97/2004, which could be changed or struck from the constitution should the government see fit. So even though the license is legitimate, there is no guarantee that online gambling will remain legal.

"This may all be moot because should the Promojuegos permit become invalidated," Thompson said, "what would happen to bwin?"