Mexico Cracks Down on Casino Corruption and Money Laundering
The casino industry in Mexico, like globally, has long been a target for money laundering by criminal organizations. The large sums of cash flowing through these establishments make them attractive for illicit activities, with little scrutiny on the source of funds. While tax authorities focus on collecting revenue, the origin of the money often goes uninvestigated.
Although Las Vegas remains a primary hub for money laundering, the gaming and betting industry continues to expand in many countries, including Mexico. The administration of President Andrés Manuel López Obrador dedicated significant time to investigating casinos in major cities and along the northern border. Beyond the issue of dirty money, corruption, including bribery of authorities to secure permits, plagues the industry.
Past Actions and Current Investigations
Recognizing the severity of the problem, President López Obrador prohibited the Ministry of the Interior (SEGOB) from issuing new casino licenses. He even dissolved the Undersecretariat of Games and Sweepstakes due to widespread corruption allegations.
Under President Claudia Sheinbaum, investigations are underway to determine if former SEGOB officials defied presidential orders by accepting bribes to extend permits or allowing unauthorized casinos to operate.
Upon assuming office, Secretary of the Interior Rosa Icela Rodríguez discovered significant irregularities within the General Directorate of Games and Sweepstakes. She ordered an audit to identify those responsible and punish anyone involved in illicit dealings with corrupt casino operators.
Government’s Stance on New Permits and Corruption
When questioned by reporter Nancy Flores, Secretary Rodríguez acknowledged that some authorizations were granted towards the end of López Obrador’s term. However, she clarified that these were not due to actions by SEGOB officials but rather the result of court rulings where businesses sought legal protection to obtain permits.
“In this administration, absolutely no new permits have been issued,” Secretary Rodríguez stated, emphasizing the government’s zero-tolerance policy on corruption within the casino industry.
Rodríguez confirmed an ongoing investigation into how these authorizations were granted and the role of SEGOB. She noted that many permits are requested but left unused, suggesting speculation. “Yes, indeed, in this administration, there are several investigations into various cases that have occurred.”
Direct Engagement with Casino Operators
Following President Sheinbaum’s instructions, Secretary Rodríguez recently met with casino owners and permit holders. She outlined three key points:
- A firm stance against corruption, warning that any casino involved in corrupt practices would be shut down, and corrupt officials would face consequences.
- A commitment to reviewing the existing law, dating back to 1947, to address issues such as legal challenges and ensure fair revenue collection for the government.
- A pledge of transparency, with direct communication between the government and casino operators, eliminating intermediaries.
“I have no representatives, no intermediaries. Let’s review the law, but we do want them to pay their taxes. So, that was the agreement, let’s say. And the law is being reviewed, and we expect to have some proposal from them by September or October,” the Secretary concluded.
Scrutiny of Past Permitting Practices
During the previous administration, Olga Sánchez Cordero and Adán Augusto López Hernández served as Secretaries of the Interior. Ricardo Peralta Saucedo, as Undersecretary of Government, was removed from his position in September 2020 as part of austerity measures.
Luis Calvo Reyes, then Director of Games and Sweepstakes, also faced dismissal. During his tenure, four new permits were authorized, stemming from the controversial permit 4117. This permit has been a source of ongoing issues, as it allowed for the opening of new gaming centers. Investigations are now focused on whether this permit remains valid.
The permit holder, Atracciones y Emociones Vallarta S.A. de C.V., led by Raúl Rocha, Rodrigo Aguirre Vizzuet, and Sergio Saide, was linked to the tragic Casino Royale incident, where 52 people died 14 years ago.
This permit holder allegedly transferred the company without adhering to the regulations of the Law of Games and Sweepstakes. They created a “spin-off” structure, dividing the company into four new entities to obtain additional permits without meeting the necessary requirements.
Through legal proceedings, four new companies were created, each receiving a new permit: DGJS/DCRCA/P-04/2020 for Grupo Blue Bet México; DGJS/DCRCA/P-02/2020 for Latam Operations; DGJS/DCRCA/P-03/2020 for True Win Group de México; and DGJS/DCRCA/P-01/2020 for Waddcore. These were spun off from permit 4117, originally granted in 1992 to Atracciones y Emociones Vallarta S.A. de C.V. Article 31 of the law prohibits the splitting or duplication of permits.
The intention was to transfer the establishments, website, operators, and all authorizations from the original permit holder to the four new companies and permits.
Due to constant inquiries and information requests, the official website of the Directorate of Games and Sweepstakes was temporarily disabled. Following pressure on authorities, the four companies relinquished their rights to the new permits.
This action violated regulations, as the original permit should have been extinguished upon the dissolution of the permit holder, rather than reverting to its previous status. This raises suspicions of inconsistencies by previous officials at the Directorate of Games and Sweepstakes.
When Adán Augusto López took over as Secretary of the Interior, Manuel Marcué Díaz, head of the Directorate of Games and Sweepstakes, pledged to clean up the entertainment sector, specifically casinos, by eliminating illegal gaming centers and ensuring that only those operating within the legal framework remained. However, little progress was made in this regard.
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