No more licences, an anti gambling stance, an economy in sharp decline combined with the devastating effects of COVID -19 could spell a rough period for the land based gambling industry. But it’s not all bad news. In
fact, stricter government control and a more cohesive long-term approach to gambling could be beneficial. More federal control over the industry could mean a
more uniform set of regulations on the industry going forwards. In March Miguel Angel Ochoa Sanchez reiterated his support for the new rules.
“In effect, they (the operators) obtained new authorisations because they went to the Judiciary, and the instruction had already been given that they should be cancelled. I asked the Secretary of the Interior to attend to this matter and she just informed me recently that the authorisations will be cancelled. "
A NEW APPROACH
No more licences, an anti gambling stance, an economy in sharp decline combined with the devastating effects of COVID -19 could spell a rough period for the land-based gambling industry. But it’s not all bad news. In fact stricter government control and a more cohesive long- term approach to gambling could be beneficial.
More federal control over the industry could mean a more uniform set of regulations for the industry going forwards. In March, Miguel Angel Ochoa Sanchez reiterated his support for new rules that would change taxes on the industry.
Mr. Ochoa said that new taxes at a federal level would lead to more certainty for national and foreign investors, which would in turn lead to greater foreign investment and more jobs.
“Te three proposals, put forward by the National Regeneration Movement (Morena) in the Chamber of Deputies and the Senate, we like because it is something that we have been asking for more than 10 years, since there are
currently three tax regimes for the sector: one that is charged by the government at the federal level, another on a state level and a third via the municipalities,” he said in an interview with a news local news service.
He explained that these charges generated a lot of confusion and uncertainty since each state levies its own taxes. In addition, taxes on the industry have increased significantly on a local level. Mr. Ochoa said the industry wanted an even playing field and be charged fairly, since that “would generate greater certainty to domestic and foreign investors when it comes to knowing clearly how much they will pay in taxes when they decide to enter this sector.”
ONLINE GAMBLING
Regulation Online gaming has been permitted via special licence in Mexico since 2000, but only land- based operators have been allowed to offer their services locally. As land-based operators may offer online services via a licence granted to them by SEGOB, a number of foreign operators have signed agreements with local operators.
However, online gambling via licensed sites in Mexico still accounts for a small proportion of casino revenue. Offshore operators continue to target the market operating in a grey area as there are no specific rules in place at the federal level when it comes to online gambling,
THE SIZE OF THE ONLINE MARKET
Te growth of casino-style gaming has led to an increased interest in betting online and growth is also being driven by sports betting. Although there is no data yet on online gambling during the lockdown, it will have undoubtedly increased significantly in common with other jurisdictions. According to the latest figures, online gambling in Mexico stands at US$2bn to $2.5bn, but around 90 per cent is still derived from illegal online sites. According to data from the National Institute of Statistics and Geography (INEGI), gambling income grew by an average of six per cent from January to August 2017, while gaming online saw a 21 per cent increase in that same period.
GOVERNMENT PLANS FOR ONLINE
Online gambling regulation could fall under the scope of new rules and regulations currently being considered by senators belonging to the Morena party. In October 2019, a parliamentary bloc belonging to the Morena party in the Chamber of Deputies presented initiatives to charge a 20 per cent Special Tax on Production and Services (IEPS) to online bets.
“Te point is that we live in an economic market in which online gambling is increasing every day, and they still do not have any concise regulation in this regard... In this form of betting there are still many tax loopholes and they continue to be a tax haven for online casinos and sports betting houses,” concluded lawmakers in the explanatory statement prepared for the new initiative.
In January 2020, federal deputy and member of the Morena bloc, Ulises Murguía Soto, put forward another initiative to allow for online gambling. Under the new proposals, SEGOB would authorise gambling and online gambling sites, which would mean better player protection measures that in turn would help safeguard against underage gambling and prevent money laundering.
NEW ONLINE TAXES
In June 2020, the Mexican government also introduced a new VAT tax rate of 16 per cent on
NEWSWIRE / INTERACTIVE / MARKET DATA P117
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