Introduction

Legal definition of ‘gambling’

What are the legal elements required for an activity to be regarded as gambling?

Legal requirements for conducting gaming activities involving bets are provided for in the Federal Gambling and Raffles Act (the Gambling Act), which became effective in 1947, and the Regulations of the Federal Gambling and Raffles Act (the Regulations), effective since 2004, and its amendments.

In general terms, the Gambling Act establishes the following in its first articles:

Article 1 - Gambling and games with bets are forbidden throughout the national territory, under the terms of this Law.

Article 2 - It will be allowed only:

I - The game of chess, checkers and other similar ones; dominoes, dice, bowling and billiards; those ones with the use of ball in all its forms and denominations; the races of people, vehicles or animals, and in general all kinds of sports.

II - Draws.

Any other game not indicated shall be deemed as prohibited for the purposes of this Law.

Article 3 - Is responsibility of the federal executive power, through the Ministry of the Interior, to regulate, authorise, control and supervise any game, when there are bets of any kind on them; as well as draws, with the exception of the National Lottery, which will be governed by its own law.

The transcribed rules stand out for its contradictions; as per article 1, gambling and games with bets are forbidden, nonetheless, article 3 grants to the federal executive power, the right to regulate and authorise any game with bets.

Moreover, article 2 makes a list of allowed games with bets, including chess, checkers and other similar games, giving full subjectivity to the determination of the referred games.

Nonetheless, based on various precedents issued by our highest courts, bets have as a main feature chance, with games of chance being understood as those in which the result does not depend on the skill or dexterity of the players, but exclusively on luck or random occurrence.

In contrast, skill games are determined, preponderantly, by the skill or dexterity of the players; however, both skills and gambling share the essential characteristic of the uncertainty of obtaining a favourable result.

Therefore, it can be said that the intention of the lawmaker was the consideration of games as those recreational activities in which the result is determined mainly by the skill or ability of the players. On the other hand, bets are identified as those games where the result is exclusively confined to luck.

Remote activity

With respect to remote or other cross-border activity, where is the wager deemed to take place?

All gaming activity, either through a remote betting centre (sportsbooks), a room for drawing numbers (land-based casinos) or online gaming, must be carried out exclusively in Mexican territory; any gaming activity from a foreign-licensed or unlicensed entity is prohibited.

Age restrictions

What is the minimum age for participating in lawful gambling?

In accordance with article 5 of the Regulations, under no circumstances may minors participate in making bets. In Mexico, the legal age of majority is 18 years old.

Penalties

What are the penalties for offering unlawful gambling?

It is the responsibility of the Mexican interior ministry (SEGOB) to regulate, authorise, control and supervise the permitted games when there are bets of any kind. SEGOB is also responsible for the regulation, authorisation, control and surveillance of gambling.

If a person is caught carrying out games with bets without having permission issued by the regulatory authority, it shall be understood that it is an illegal activity.

According to article 12 of the Gambling Act, a prison term between three months and three years and a fine of between 500 and 10,000 Mexican pesos will be imposed on the owners, organisers, managers, administrators and players involved where forbidden gambling and bets take place, as well as others who participate in any way.

Accordingly, article 13 of the Gambling Act sanctions imprisonment of between one month and two years, and a fine of between 100 and 5,000 Mexican pesos for those who rent a place for forbidden gambling and bets, or practise raffles without the permission of SEGOB, or attend a place where unlawful gambling takes place.

In addition, based on article 14 of the Gambling Act, the tools and objects used on illegal gambling, as well as the goods or money, will be subject to confiscation.

On the other hand, article 4 of the Regulations states that the venues, open or closed, in which illegal gambling or gambling without the appropriate permit is carried out will be immediately closed down by the authority.

Likewise, based on article 151 of the Regulations, in the case of serious infringements of the licence, the revocation of the permit will be ordered, and, where appropriate, the establishment will be closed down in cases that do not comply with the terms and conditions established in the permit or the Gambling Act.

From a civil law point of view, a player who is not paid a price from an illegal bet has no civil action against the other party nor the organiser.

Does the law penalise the gambler directly for participating in unlawful gambling?

Accordingly, article 13 of the Gambling Act states that a person may be sanctioned with imprisonment of between one month and two years, and a fine between 100 and 5,000 Mexican pesos, among others, for attending a place where unlawful gambling takes place.

Social and non-profit gambling

Are there exceptions for social gambling, or charitable or non-profit gambling?

According to article 12 of the Gambling Act, those who organise raffles among friends and relatives only are not included in the prohibition it establishes. In other words, in this case a permit granted by SEGOB will not be required.

Similarly, article 15 of the Gambling Act sets forth that the foregoing provisions or prohibitions do not include games that are held in private homes for the sole purpose of entertainment or occasional pastime. These games should not be practised regularly and people who have no family relations or close social relationships with the owners or residents should not be allowed in the home for them.

Regulatory authorities

What entity regulates land-based and remote gambling, and what are the regulator’s powers?

In terms of article 3 of the Gambling Act, SEGOB is the federal executive power responsible for the regulation, authorisation, supervision and enforcement with regard to gambling and raffles activities when gambling with bets of any kind is involved, no distinction of land-based and remote gaming is made.

SEGOB is responsible for the regulation, authorisation, control and surveillance of the games when there are bets of any kind, as well as draws, with the exception of the National Lottery for the Public Assistance (LOTENAL), which is owned by the government and has its own law.

These powers are confirmed in article 2 of the Regulations, which establishes that SEGOB is responsible for the administrative interpretation and application of the provisions of the Gambling Act on the matter.

Anti-money-laundering regulations

Are gambling licensees considered financial institutions for purposes of anti-money-laundering and similar financial services regulatory requirements or are they otherwise subject to such requirements?

The permit holders are obliged to follow and comply with the Federal Laws on the Prevention and Identification of Transactions with Funds from Illegal Sources, the Regulations to the Federal Law on the Prevention and Identification of Transactions with Funds from Illegal Sources, the General Rules referred to by the Federal Law on the Prevention and Identification of Transactions with Illegal Resources and the Resolutions by which the registration and notice forms for those carrying out vulnerable activities are issued.

The main factor that triggers the application of the Anti-Money Laundering Law is for an individual or legal entity to carry out what the Anti-Money Laundering Law terms a ‘vulnerable activity’. According to article 17 of the Anti-Money Laundering Law:

Article 17. For the purposes of this Law, the activities listed as follows will be understood as Vulnerable Activities, and therefore, object of identification, in terms of the following article: . . .

I. Activities associated to the practice of betting games, contests or lotteries carried out by decentralised organisms in accordance with the applicable legal provisions or carried out under the permits in effect granted by the Ministry of the Interior under system established by the Gambling Act and its Regulations. In these cases, only in the event the same are carried out under the following modalities and amounts: . . .

The sale of tickets, chips or any other kind of similar receipt for the practice of such games, contests or lotteries, as well as the payment of the value representing such tickets, chips or receipts or, in general, the delivery or payment of prizes and the realisation of any kind of financial transaction, either carried out individually, or through a series of transactions that appear to be related among themselves, with the people participating in such games, contests and or lotteries, even though the value of any of these transactions is in an amount equivalent or higher than three hundred and twenty five times the minimum wage in effect in Mexico City . . .

Land-based gambling

Types

What types of land-based gambling are permitted in your jurisdiction, and is gambling regulated at a national or subnational level?

All authorisations to conduct games with bets are granted by SEGOB, and all kinds of permits related to the operating licence or use of land for gambling purposes are granted by the local authorities.

In Mexico, practically all games with bets are allowed and can be operated by private individuals under a permit holder or through authorised operators in terms of the Regulations to jointly use the permit granted by SEGOB. The permitted games with bets are as follows:

  • chess, checkers and other similar games;
  • dominoes, dice, bowling and billiards;
  • games that use a ball in any form;
  • human, vehicle or animal races, and all other sports; and
  • all authorised types of draw, including:
    • sweepstakes with ticket sales;
    • sweepstakes without ticket sales;
    • instant draws;
    • raffles in marketing systems;
    • draws of symbols or numbers;
    • draws of numbers or symbols through machines (slot machines); and
    • raffles through mass communication (gaming online).

It is common to find in the authorised establishments in Mexico all kinds of games, such as slot machines, roulettes, dice, bingo, card games in all forms, such as blackjack and poker, sportsbooks and the operation of online gaming.

However, before any betting game is carried out by the permit holder, the mechanism of the operation of the betting system, control mechanisms and rules of the games to be offered to the players, must be submitted or filed to SEGOB. Similarly, the computer infrastructure, the technological and computer security system, as well as the technical support policies to be used must be specified to SEGOB.

On the other hand, not only private individuals operate games with bets, but also the Mexican government through the National Lottery for Public Assistance, better known as the National Lottery.

The purpose of the National Lottery is to generate financial resources through the sale of lottery tickets in different raffles, which are then used for the creation of jobs and public assistance.

Establishment licensing

Please describe the licensing criteria to operate land-based gambling of each type or classification. Does your jurisdiction limit the number of available licences?

The regulation, authorisation, supervision and enforcement with regard to gambling and raffles activities, when gambling with bets of any kind is involved, are under the responsibility and charge of the state executive power through SEGOB. There are four main types of permit:

  • for opening and operating horse and greyhound race tracks, jai alai fronton arenas, remote betting centres (sportsbooks) and betting centres or rooms for drawing numbers (land-based casinos under which live gaming, slot machines and online gaming activities are classified);
  • for opening and operating facilities for gambling in national fairs (ie, Feria Nacional de San Marcos);
  • for opening and operating temporary off-site horse race betting and cockfighting; and
  • for holding any of the regulated types of drawings.

The authorisation, terms, conditions or restrictions are established in the permit and in the Regulations. Among others, the most common restrictions for the permit holder are:

  • to abstain from operating gambling games and raffles other than those explicitly authorised by law or permits;
  • to apply for an authorisation, or, depending on the case, notify SEGOB of the opening or change of address of a gambling facility;
  • to abstain from assigning, transferring or selling the permit;
  • to refrain from giving credit to players or gamblers;
  • to refrain from installing casinos within 200 metres of an educational institution or religious centre;
  • to refrain from allowing the admission of underage players or people under the influence of alcohol or drugs into the establishments;
  • to inform SEGOB of any change in the shareholder structure of the permit holder;
  • to forbid shareholders of the permit holder to be individuals or legal entities resident in territories with tax advantages or jurisdictions with low tax rates; and
  • to forbid the acquisition of shares of the permit holder, directly or indirectly, through trusts.

Additionally, permit holders must fulfil other obligations, such as incorporating terms and conditions for better corporate practices, and holding a board of directors comprising 25 per cent independent administrators, as well as administrative obligations such as:

  • granting and updating guarantees;
  • adhering to local legislation (eg, by keeping inventory reports);
  • obtaining civil protection permits;
  • guaranteeing public safety;
  • paying customs and taxes; and
  • filing annual tax returns and authority reports.
Director, officer and owner licensing

Must individual directors, officers or owners of licensees also be licensed or reviewed for suitability?

In terms of the Regulations, permits to conduct games with bets will only be granted to companies duly organised according to Mexico’s applicable laws. To obtain a permit to conduct games with bets, both shareholders and beneficiaries who participate as partners in the company must file the following to the authority:

  • personal information such as name, nationality and address;
  • balance sheet status, specifying the origin of the capital subscribed or contributed to the company, as well as the details of real estate property and, where applicable, a tax return corresponding to the past five years;
  • his or her curriculum vitae;
  • details of professional or patrimonial relationships existing with other permit holder companies or with the partners, shareholders, directors, beneficiaries or officers thereof;
  • affirmation under oath evidencing that he or she has not been prosecuted or convicted of a crime of a patrimonial nature, that relates to tax, or that relates to organised crime or operations with resources of illegal origin; and
  • a credit report issued by a credit information institution, duly authorised by the federal authority to evidence that no negative records or past due credits exist.

The above-mentioned information must also be filed regarding individuals serving as directors, commissioners and officials acting as chief executive officers and subordinates in the requesting company.

Location

May a gambling location be part of a resort, restaurant or other multi-purpose location? What limitations apply?

There is no restriction to install gambling establishments in resorts or restaurants. In fact, nowadays, several establishments are located in operating shopping centres and hotels.

Passive/institutional ownership

Are there provisions for passive or institutional ownership that allow for exemption or modification of licensing requirements?

According to article 92 of the Regulations, permits for draws may be granted to:

  • dependencies and entities of the Federal Public Administration and states;
  • national political parties and groups, which shall comply, in addition to the provisions of the Gambling Act and the Regulations, with the provisions of the federal electoral legislation; and
  • civil and religious associations, and educational, research and charity institutions.
Responsible gambling

What responsible gambling obligations apply to licensees?

Article 5 of the Regulations establishes that access to the gaming areas of establishments must be prohibited to persons who:

  • are minors, except when accompanied by an adult to live shows (but under no circumstances may minors participate in the betting);
  • are in possession or under the influence of prohibited substances, or in a state of intoxication;
  • carry weapons of any kind;
  • are members of uniformed police or military institutions in service;
  • with their behaviour alter the peace or order in the establishment;
  • are or have been caught cheating; and
  • do not comply with the internal regulations of the establishment.
Taxes

What type of tax and what tax rate applies to each form of lawful land-based gambling activity?

The following are types of federal taxes:

  • permit contributions - contributions payable by the permit holder to SEGOB that are set out in the permit (1 or 2 per cent);
  • IEPS - the special tax on production and services for remote betting and gaming; and
  • federal player withholding tax - tax to be withheld by the operator or by the permit holder in accordance with any Mexican federal law resulting from the revenue of the prizes obtained by players from their use of the website.

The following are local taxes, which may or may not apply depending on the particular local regulation:

  • state operator tax - tax (if any) to be paid by the permit holder or the operator in accordance with any Mexican state law; and
  • state player withholding tax - tax (if any) to be withheld by the operator or the permit holder in accordance with any Mexican state laws resulting from the revenue of the prizes obtained by players from their use of the website.

Remote gambling

Types

Is remote gambling permitted and, if so, what types?

Online gambling operations are regulated by articles 76 to 90 of the Regulations, which establish that permit holders authorised to operate remote betting centres can receive bets through the internet, telephone and electronic means.

According to article 76 of the Regulations, remote betting centres are authorised by SEGOB to capture and handle bets for different events, such as sport competitions and games allowed by the Regulations, carried out abroad or in the national territory and transmitted in real time and in a simultaneous manner in video and audio (simulcasting), as well as conducting drawing of numbers (bingo) referred to in paragraph IV of article 124 of the Regulations and in terms of article 85 of the Regulations. Such remote betting centres may capture bets via the internet, by telephone or via electronic communications.

Moreover, and according to article 104 of the Regulations, in the case of drawing of numbers and symbols, it is permissible for permit holders to capture bets from participants via the internet.

To this effect, permit holders must establish an internal control system for transactions to be carried out by this platform and must provide a description in writing of the rules and procedures that ensure the inviolability and prevent the manipulation of the betting systems. Therefore, permit holders must describe the type and rules of games that will be conducted, such as, inter alia, blackjack, poker in all of its forms and roulette.

Licensing

What are the criteria for obtaining a licence to operate remote gambling?

Online gaming operations do not require additional licences, provided that the permit holder has been authorised for remote betting centres and rooms where raffles and games featuring numbers and symbols may take place. They only require requesting and obtaining the approval of its mechanisms and controls, as established in articles 85 and 98 of the Regulations. Article 85 provides that, for permit holders to be able to capture bets via the internet, the following requirements must be complied with:

  • the establishment must have an internal control system for transactions to be carried out via this platform;
  • the establishment must submit a written description of the rules and procedures to ensure the inviolability and prevent the manipulation of their betting system to SEGOB for approval; and
  • the computer system must be able to record at a minimum:
    • the account number of the players and the identity of the gamblers; and
    • the date, time, number of their transactions, amount of the bets and the games.

Accordingly, the systems to be used by the establishments for capturing bets via the internet must be first approved in writing by SEGOB. To this effect, the permit holder must file a description of its online betting procedures, as well as its online betting control system, to SEGOB.

As previously mentioned, permit holders must describe not only their betting procedures to obtain SEGOB’s approval in terms of article 85 of the Regulations, but also the different types of games to be offered online to participants in order to avoid future challenges from the authorities regarding the authorised games to capture bets via the internet.

How do the licensing criteria for remote gambling operators differ from those applicable to land-based operators?

In terms of the Regulations, in order to be able to capture and conduct remote gambling, the operator must have a land-based permit in terms of article 20 of the Regulations and must comply with the terms, conditions, information, documents and requirements it establishes.

There is no limit regarding the number of licences to be granted by SEGOB.

Cross-border gambling

May operators located in other countries offer internet gambling to consumers in your jurisdiction without obtaining a licence there?

A land-based casino or an online gambling operation may not be established or function in national territory without a licence issued by SEGOB.

In addition to the above, according to article 9 of the Regulations, permit holders may only carry out publicity and advertising of the games with bets and raffles authorised in accordance with the Gambling Act and the Regulations.

Moreover, the advertising and promotion of games with bets and draws by any means may only be made and dispersed once the permit from SEGOB to carry out them is obtained, and the publicity must be expressed in a clear and precise manner to prevent the participants experiencing any error or confusion.

May operators licensed in your jurisdiction offer internet gambling to consumers in other countries?

The scope of application of Mexican legislation regarding games and raffles is restricted exclusively to Mexican territory; however, there is no restriction or prohibition in the Regulations for people abroad to access and participate via the internet in online gaming offered. In other words, the prohibition or restriction of such participation, or the implementation of technological controls will be under the jurisdiction of the other countries.

Taxes

What tax rate applies to each form of remote gambling?

See question 15.

Intellectual property

Patents

Are gambling games - land-based or remote - patentable in your jurisdiction?

Computer programs (software), such as gambling games, are susceptible to copyright protection. The only requirement demanded today, both by Mexican legislation and by international treaties for the protection of any work by means of copyright, is that it has to be an original creation, excluding criteria of innovation, inventiveness, utility or even registration for its protection.

Because of the nature of gambling games, these are inclined to be complemented and accumulated to the protection of other intellectual property rights, such as the brand or commercial name registration under which it is commercialised, musical works, pictures or drawings, or photographic or applied works of art that include graphic designs contained in the software.

Trademarks

Are there limitations on how brands, logos or other types of marks may be used in promoting gambling games?

The purpose of brand registration is that a distinctive sign, such as a logo, may distinguish and identify a product or service (in this case, a gambling game) or others of the same type.

With this understanding, there is no type of limitation on how brands, logos or other types of marks may be granted. A separate issue is the restrictions for the promotion and advertising of the gaming activity (see question 24).

Advertising

Restrictions

What types of restrictions apply to advertising gambling games?

Advertising and promotion of gaming activities by any means may only be made and disseminated with the permission of SEGOB, and must:

  • not explicitly promote games involving bets;
  • be expressed clearly and precisely to avoid the public experiencing erroneous information, deception or confusion;
  • indicate the corresponding licence number;
  • include messages that indicate that games with bets are prohibited for minors; and
  • include messages that invite people to play responsibly and with the main purpose of entertainment, fun and recreation.

Suppliers

Licensing

What types of suppliers to gambling operators require licences?

As a general rule, no supplier of ordinary goods or services (such as software and machines distributors) are required to obtain any special licence or authorisation regarding the gaming industry. If applicable to its industry, a supplier of goods or services would require the licences or authorisations for its sector, depending on the branch and activity of the service provided or goods offered (eg, a local health certificate required for food and beverage serving).

As an exception, the tax legislation provides the figure of authorised service provider (PSA), which refers to the entity authorised by the Tax Administration Service (SAT) and hired by an operator or permit holder that provides the technology infrastructure, the computer systems or the services required to permanently obtain the information of each and every one of their machines or gaming terminals, monitoring operations performed live or remotely, consulting online data and the filing of reports to SAT, as well as the administration of the information and or data stored in the aforementioned systems.

Also, there are entities called verifying bodies, which are responsible for ensuring that the PSA suppliers’ reports comply with the Regulations, in order to assure that the computer systems are able to provide SAT with the complete information of the central betting system, as well as the cash and cash control system, and comply with the requirements of security, reliability and inviolability of the process and the deliverable product, which also requires being duly authorised by SAT.

Registration

If licensing is not required, is there a registration or other process suppliers are subject to, and what triggers that process?

Some suppliers of goods are required to certify their products. For example, the suppliers or manufacturers of gaming machines have the obligation to certify their machines in compliance with Official Mexican Standards, such as NOM-024-SCFI-2013 for commercial information for instructive packaging and guarantees of the electronic, electrical and household appliance products; and NOM-001-SCFI-1993, related to electronic appliances, household electric powered appliances, sources of electrical energy, safety requirements and test methods for type approval.

Casino projects

Casino development

What considerations arise in developing a casino resort project that are not typical to other resort development?

As a general rule, casino resort projects do not require special or different approval from a typical resort development, beyond the licence required for the operation of a land-based casino. In other words, for both cases, the same authorisations will be required for the operation and installation, whether federal, state or municipal, such as the construction licence, civil protection authorisation and environmental licences, among others.

However, in the operation and installation of a casino resort, besides the necessary authorisations for its legal construction and operation, the casino must have a licence for the operation of a land-based casino granted by SEGOB. Another fundamental document that a casino needs for its operation is a local (municipal) approval or favourable opinion.

SEGOB has announced its intention to bring up a huge project for the creation of casino complexes in areas such as the Riviera Maya, Nayarit and in Baja California, with the purpose of promoting tourism in those areas.

Labour and employment

Wage and hour rules

Are there particular rules governing hours and wage treatment for casino employees?

Minimum wage

By law, employees have to be paid at least the legal minimum wage. Minimum wages are established on a yearly basis taking into consideration the annual inflation rate for the country. The current minimum wage is 88.30 Mexican pesos per day.

Hours of work

The maximum work week is 48 hours for a work week consisting of day shifts, 42 hours for night shifts and 45 hours for mixed shifts. The working week consists of six work days, although the daily or weekly distribution of hours can be arranged by agreement so that employees have all or part of Saturday and Sunday as normal days off.

Employees are entitled to at least one day of rest with full pay for every six days of work, and it is expected that this day would normally be Sunday. Employees required to work on Sundays (as a regular work day) are entitled to receive an extra bonus of 25 per cent of a normal day’s wage.

An employee can only be required to work overtime in special cases, and for doing so must be paid overtime equal to double pay for overtime of up to three hours in one day, up to a maximum of nine hours per week. Beyond this limit, triple the normal salary must be paid for each hour of overtime worked.

Collective labour

Must casino employees be members of labour unions or similar organisations?

There are no special obligations for workers of casinos to be members of labour unions. Notwithstanding the above, generally, it is usually preferable that a company operates with a union representing its workers rather than without one. Having a union in Mexico, for example, provides an advantage to an employer under Mexico’s labour law, if there is no union agreement in force at a given facility, any union may claim at any time to represent the employees of the workplace and serve a strike notice demanding that the employer sign a collective bargaining agreement with that union. It is not necessary for the union to actually prove that it represents the majority of the workers at the workplace.

To take advantage of this, an employer may choose to recognise and sign a collective bargaining agreement with an inactive union. This has been a common practice in Mexico for more than 20 years. This practice forces any other union desiring to be certified for the employer’s operations and to effectively take over the collective bargaining agreement to first prove that it represents a majority of the unionised workers. It is, of course, necessary to be careful in the selection of the appropriate union with which to agree to execute a collective bargaining agreement.

Acquisitions and changes of control

Change of control

How are licensee changes of control, and substantial changes in shareholdings of licensees, addressed?

Both permit holders and operators (the latter always through the permit holder) are obliged to inform SEGOB of any transfer or assignment of shares or equity interest of its capital stock, or any modification of the percentage of participation of its partners or shareholders, as well as the modification of the shareholding of the shareholders of these until the last beneficiary.

Such an obligation is applicable to any change in the shareholder composition of the permit holder or operator or of the shareholders or partners of these, regardless of the vehicle used, either through capitalisations, capital decreases, splits, mergers or other corporate practice in which other companies mediate between the permit holder or operator, shareholders, partners and past beneficiaries.

This is not necessary in transactions carried out through the Mexican Stock Exchange in which the transaction does not imply a change of control in the permit holder.

Bankruptcy

How are gambling licences treated in bankruptcy?

The Mexican legislation does not specifically consider the term ‘bankruptcy’; instead, the Commercial Bankruptcy Law establishes ‘mercantile insolvency’, which is a judicial process where all creditors of the company must appear to demand their rights.

The mercantile insolvency procedure begins with the resolution issued by the judicial authority that determined the legal origin of it. This resolution must necessarily contain the requirements established in article 43 of the aforementioned law.

Regarding games and raffles, a creditor cannot be awarded or adjudged a federal permit because these are not transferable, as established in article 31 of the Regulations. It also cannot be subject to encumbrance, assignment, transfer or sale. In addition, if a permit holder or any of its shareholders or beneficiaries is declared insolvent, SEGOB will automatically, in accordance with articles 34 and 151 of the Regulations, extinguish or revoke the permit and, if applicable, will close the casino.

On the other hand, creditors who have the right to receive a payment of a debt from the permit holder must claim and obtain acknowledgment of their credit, and await to obtain their payment against the assets or rights of the debtor (permit holder).

Quasi-gambling

Regulation

How are forms of ‘quasi-gambling’ regulated? Are any treated as ‘gambling’, and what triggers such treatment?

The term ‘quasi-gaming’ is not defined by the gambling legislation. However, article 15 of the Gambling Act establishes that all the games held in private homes (social games) for the sole purpose of entertainment or as occasional hobbies shall not be included under the Regulations, provided that these games are not practised regularly and the participants have family relations or close social connections with the owners or residents.

Similarly, and in accordance with article 2 of the Gambling Act, only the games described in such article may be allowed throughout the national territory (see question 1).

Licensing

Does your jurisdiction license quasi-gambling operators?

The terms ‘quasi-gambling’ and ‘quasi-gambling operators’ are neither defined by Gambling Act nor by the Regulations.

Other restrictions

Does your jurisdiction impose other restrictions on the conduct of quasi-gambling activity, including restrictions on advertising, age of participation, limitations on prizes, etc?

The term ‘quasi-gambling’ is neither defined by Gambling Act nor by the Regulations.

Litigation

Recent cases

What, if any, significant litigation involving the gambling or quasi-gambling sectors has your jurisdiction seen in recent years?

In recent years, there have been some significant disputes that have been relevant for the gaming industry in Mexico. An example of this are the disputes that took place between three or four permit holders with SEGOB, and a permit holder and an authorised operator, which culminated with the declaration of ‘revocation’ of their respective permits and the closure of more than 40 establishments. The origin of these disputes was, among others, the assumed use of altered or false documents.

The order of definitive closure of the facilities resulted in significant losses not only for the owners of the venues and employees, but also for suppliers such as the manufacturers of the machines and owners of the establishments, since suppliers are not allowed to immediately recover their machines or the legal possession of the leased real estate.

Update and trends

Recent developments

Highlight any noteworthy developments or trends in the gambling or quasi-gambling sectors (legal or business) and their potential implications.

No updates at this time.