Latin American News Round-Up

Attack on Casino Royale Leaves 52 Dead

Armed men set fire to a casino in the northern province of Monterrey, Mexico. The casino, located in an affluent part of Mexico’s third-largest city, was busy with mainly middle-class customers—most of them women. According to witnesses, the gunmen burst into the casino, doused it with gasoline and ordered everyone out. But terrified customers and staff fled farther inside. The two dozen gunmen then set a light to the casino and fled.

In the aftermath of the attack, President Felipe Calderon sent in troops to the city, along with an additional 1,500 police officers and condemned the attack as an “abhorrent act of terror and barbarism.” The attack is arguably the worst since Calderon announced his war on drug cartels in 2006, a war that has already claimed an estimated 41,000 lives.

Five of the gunmen have been arrested at the time of writing this article, and the motive for the attack is still unknown. The state of Nuevo Lyon, of which Monterrey is the capital, is one of the state’s most affected by gang war between rival drug cartels. It is believed that the casino may have been targeted because its owners refused to pay protection money. Other casinos in the city have also been targeted in the past by drug cartels and the Casino Royale had also already been attacked twice.

The attack led to calls from local leaders, as well as high-ranking members of the church to put a halt to the granting of casino licenses in Mexico. Shortly after the attack, the American Consulate in Monterrey issued an urgent warning to its citizens and staff. Noting earlier attacks on casinos in neighboring Tamaulipas state, including a grenade attack on a casino in Reynosa and another attack on a casino in the city of Nuevo Laredo, consular employees and their families have been told “to avoid frequenting casinos, adult clubs and similar gathering places that have been targets for violence by transnational criminal organizations.”

Casinos Granted Temporary Stays of Closure

President Rafael Correa has announced that casinos operating with a license in Ecuador will have two more years before they will have to close. Correa announced to local television channel RTS that, “The legal casinos will have a period of about one and two years to be closed gradually.”

His announcements come at a time when his administration is actively closing down slot parlors throughout the country. Slot parlors outside of hotels were banned by Articles 91 and 92 of the 2002 gaming act. Many slot parlor owners had legitimately been given a license to run before the act of 2002 and had, in many instances, successfully fought the closures through the courts.

These stays of closure have now been superseded by Ecuador’s ban on gaming, after Ecuadorians took to the polls in May and voted in the majority that they were opposed to gambling. According to the government, 121 casinos, bingo halls and slot machine parlors now face immediate closure. These closures began in August nationwide and are continuing apace with 83 closures so far.

Correa’s statements mean that 32 casinos that have a legitimate license do not have to close straight away, as feared, although local industry insiders had claimed that they needed at least another five years before they could recuperate their initial investment. Today, half of the casinos in Ecuador are currently located in hotels categorized by the tourist ministry as “hotels de lujo” which means five-star hotels. The others are located in three- and four-star hotels. Combined, they employ around 3,200 people.

New Gaming Law Facing Opposition from Casino Sector

In February, the Bolivian government passed “Ley 60,” a new gaming law that increased taxation on casinos and slot parlors from 15 percent to 30 percent and also established a new tax on the player. Known as El Impuesto a la Participación en el Juego (the Tax on Gaming Participation) the tax stands at 15 percent at the moment the player buys chips or credit for a slot machine. The Bolivian government provided casinos and slot parlors until June 8 to present their cases for permission to operate under the new act, which went into effect on June 29.

The new taxes, which were aimed at raising an additional $18 million per year in gaming tax revenue, met with immediate opposition from members of the gaming sector. They claimed that the hike was not only excessive, but went in direct contravention of the original terms of their licenses. As a result, some casino and slot parlor operators did not comply with the new regulations, as they had questioned the validity of the new act in the Constitutional Court and were waiting for the court’s decision. This included Bingo Bahiti, one of the biggest operators in the country.

In the early hours of July 13, the newly established Authority of Taxation and Control Over Gaming raided six Bingo Bahiti casinos in Santa Cruz for failure to meet with the requirements of the new gaming act and confiscated 1,500 slot machines. The head of the Authority of Taxation and Control Over Gaming claimed after the raids that gaming companies with do not comply with the new law will be liable to heavy fines and that “the operation which began in Santa Cruz will expand all over the country until they have reached every business that is operating illegally.”

The dispute has become increasingly acrimonious of late, and in August culminated in spokesman for Bingo Bahiti, claiming that the government’s actions had been abusive and illegal, and that they were considering taking their case to both the local and possibly the international courts.

Law to Permit Casinos on Cruise Ships Passed

Chile’s lower house, the Chamber of Deputies, has passed a law that will allow casinos on cruise ships to operate while sailing on Chilean waters. As previously reported, the new law was driven by the fact that since they were banned from doing so in 2005, the number of cruise ships docking in Chile’s ports has decreased by 40 percent.

The law also provides passengers on cruise ships with tax incentives for coming to Chile, such as the waiving of VAT for foreign passenger visitors. During the casino ban, it is estimated that the Chilean government lost $35 million per year in terms of money spent by tourists on Chilean shores.

Although the law received considerable opposition from lobbying groups on behalf of the casinos operating on the mainland, the law passed by a majority of 77 votes in favor, with three congressmen voting against the new law and four abstentions. The law has now been put before the senate, where it will be fast tracked, and, in all likelihood, be in place for November. This is because cruise ship itineraries are planned two years in advance so that for Chile to feature more prominently in the cruise ship calendar in 2014, the law must be in place by the end of this year.

The new law is unlikely to impact the land-based casino industry in Chile, as casinos in cruise ships can only be open when they are at least three miles away from the coast and will not be permitted to open while docked. Casinos operating in foreign cruise ships will have to register with the Chilean Gaming Control Board and will be given a license for five years which can be renewed.

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