Latin American News Round-Up

Chileans Believe Casinos are “Elitist,” According to Poll
According to a recent poll, Chileans are discouraged from going to casinos because they believe them to be “elitist” and for “people with money.” The poll was carried out by local research company Visión Humana in order to gauge the development of the casino industry in terms of how it is perceived by Chileans. The poll also found that locals were positive about the tax income generated by casinos. The poll discovered that 55 percent of those interviewed claimed that they are satisfied with the way the industry is developing, while 41 percent said that they personally wouldn’t go to a casino.

Chileans are also put off by the fact that customers have to pay an entrance fee—76 percent of those interviewed said that they would not attend a casino because of entrance fees, while 57 percent would not go to a casino because they do not know how to play. According to the manager of Visión Humana, Patricio Polizzi, in an interview with news portal Tierra, the challenge that the local casino industry faces in Chile is to reverse the negative image of casinos. Polizzi said the key to doing this is to promote casinos as part of larger entertainment facilities and not as places “with people wearing dinner jackets.”

Despite the findings of the poll, the casino industry still continues to do well in Chile. According to the most recent figures released by the Chilean Gaming Control Board, the 15 casinos now up and running in Chile receive just fewer than 600,000 visitors every month.

Government to Look into Casino Licenses
As previously reported, the Paraguayan Gaming Control Board (CONAJZAR) has come under fierce criticism of late for its failure to grant licenses. In November 2010, the board began a tender process for the opening of a number of large-scale casinos that would be designed to improve tourist infrastructure and would be attached to hotels in tourist hotspots. The board, however, suspended the third tender process until July and then cancelled the tender process altogether in 2011.

Criticism against the Gaming Control Board has been increasing among a growing belief that CONAJZAR is unable to oversee the granting of licenses. As a result, the government now seems to be taking a stronger hand in the issue. In September, the Chamber of Deputies approved a project that formally requests that the Gaming Control Board hand over a detailed report about its granting of gambling licenses. This includes sports betting licenses and licenses to run quiniela games.

Quiniela is the most popular from of betting in Paraguay, and controversy still continues over local gaming company Mepshow, which has the right to run quiniela in Paraguay and owes the state a multimillion dollar debt in back taxes. Also covered in the request is information on all casino licenses and extensions of licenses granted by the Gaming Board between 2008 and 2011.

It is believed that once the report is submitted, the national government could take a stronger role in the issue of gaming. As visitor numbers increase in Paraguay, it is believed that large-scale casinos in five-star hotels could be a key factor in strengthening the local tourist industry.

Massacre in Casino Leads to Reforms
On Aug. 25, members of the Zeta drug cartel torched the Casino Royale in Monterrey, the capital of the northern Mexican state Nuevo Leon. The attack left 52 people dead and a dozen people injured. It is now believed that the motive for the attack was the casino owner’s refusal to pay protection money to the Zeta gang—one of the most violent criminal organizations in Mexico’s growing drug wars.

The attack has not only led to an increasingly heavy military and police presence in the state, but also a wide-sweeping investigation into casinos and gambling houses. In the city of Monterrey, 32 of the 50 casinos in the area have closed while Mexican authorities have confiscated more than 1,500 slot machines that were found to be operating illegally. The state government, meanwhile, has launched an investigative committee to look into the links between the granting of casino licenses, extensions of licenses and corruption.

Part of the scale of the tragedy in the Casino Royale has been attributed to inadequate emergency exits and lax safety regulations, with survivors claiming that emergency exits were blocked. Consequently, government inspectors are now also investigating emergency facilities in gambling houses and closing those that fail to comply. This is also occurring nationwide in other states such as Jalisco, where five of the 11 casinos operating in state capital Guadalajara were recently closed by government inspectors.

The tragedy has also sparked a national debate on the swift rise of gambling in Mexico. The Secretary of Government (SEGOB), Mexico’s Interior Ministry, has launched an investigation into the licenses held by the 27 companies that are authorized to run gaming operations in Mexico. SEGOB will review and thoroughly investigate the terms of all licenses of the 561 casinos in Mexico, while the number of onsite inspections will continue to increase nationwide.

Casinos Now Have Only Six Months to Close
Despite President Rafael Correa’s recent statements to local television station RTS that “the legal casinos will have a period of about one and two years to be closed gradually,” it has now emerged that casinos in Ecuador now only have six months before they will have to close.

Ecuadorians voted against bingo halls, slot parlors and casinos in a referendum in May 2011. While all slot machine parlors are now being closed down, it was hoped that casinos with a license to operate in five-star hotels would be granted a certain amount of time in order to recoup their initial investment. This will not to be the case, and the closure of slot parlors has occurred more rapidly than previously envisaged.

According to local industry insiders, the result of the ban will mean that casino operators will relocate their businesses elsewhere and some five-star hotels could close. Fausto Flores, spokesman for the Casino and Bingo Association of Ecuador, told the press that, “Investors will go to countries like Costa Rica, Puerto Rico and Colombia where casinos are considered to be an activity which complements the tourism industry.”

Flores also explained that those international investors in hotels with casinos could also withdraw their investment and that gaming operators will now work quickly to move their gaming operations and place them in new markets. Flores pointed out that the industry had hoped that the government would have provided casinos at least another five years to recoup an estimated $180 million investment before they had to close.

However, in September President Rafael Correa issued Executive Decree 873, banning slot parlors and bingo halls immediately and gave casinos just six months to close. The act also banned the importation of any gambling-related products to Ecuador in the future.

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