Casinos, por favor

September 24, 1995|By Tracy Eaton

HUATULCO, Mexico -- Gambling fever has struck Mexico, with supporters going all out to persuade the Mexican government to lift a 41-year-old ban on casino gaming.

The cash-starved government is listening, intrigued by the prospect of collecting hundreds of millions of tax dollars from casinos every year.

Some entrepreneurs are so confident that the government will approve casinos that they've begun buying slot machines and other equipment, supporters say.

But not everyone likes the idea. Some feel casinos will fuel crime and corruption. Others oppose casinos on moral grounds.

Countries that promote casinos are dangerously preoccupied with money and wealth, said Edgar Alvarado, a lawyer and adviser to Mexican lawmakers.

"Casinos are a reflection of a nation's lack of identity," he said. "Unfortunately, we're accustomed to taking the easy path, benefiting only a few."

Mr. Alvarado was heavily outnumbered at a government-sponsored forum on casinos in the resort town of Huatulco last month.

Supporters said they found it odd that anyone would oppose casinos in Mexico since gambling in most other forms is accepted or at least tolerated.

Historians say the old taboo can be traced to the 1930s. Casinos were banned by a beloved president, Lazaro Cardenas, and no one has been willing to tinker with his wishes.

Mexico's political situation has changed dramatically since then, casino supporters say.

Under Mr. Cardenas, the country was protectionist, nationalistic and anti-free trade.

Today, Mexico is opening up the economy and expanding trade ties. Building casinos is a natural next step, supporters say.

And they came to the Huatulco forum armed with stacks of studies to prove their point.

Tennessee-based Harrah's Entertainment Inc. studied the economic impact of casinos at Mexico's top 10 tourist destinations.

The company concluded that after five years the casinos would produce:

* Nearly 130,000 permanent jobs with a total payroll of $855 million.

* $2.2 billion per year in gaming and related revenue.

* $795 million in tax revenue, including taxes on casino profits and workers' wages.

The company also said the casinos could expect as many as 33 million customers per year.

"The economic opportunities that casino gaming presents are real, but their capture requires solid casino operators working in tandem with astute local officials and private developers," said the study by Harrah's, which is building a $650 million casino, the world's largest, in New Orleans.

Not everyone accepts those figures.

'Happy numbers'

Rogelio Jimenez, a Mexico City architect who supports casinos, calls them "happy numbers." It's not safe, he said, to assume that profits in Mexico would be as high as they are in the United States.

"Just because a plane factory does well in Seattle doesn't mean a similar factory would do well in Merida," he said.

Others accuse the government of looking to casinos as a way out of the economic crisis that began with the devaluation of the peso in December.

Casino supporters and government officials deny that.

Gaming "isn't a panacea or a solution," said Mario Villanueva, governor of Quintana Roo, home to the glitzy resort town of Cancun, Mexico's top tourist destination.

However, he said, casinos will boost the tourist trade, the country's third-largest industry behind oil and manufacturing.

About 6.6 million people visited Mexico last year, spending an estimated $4 billion. But the number of travelers has slid in recent years, Mr. Villanueva said.

Those in the tourist trade hope casinos will reverse the trend.

Some want the first casinos to be built in relatively undeveloped areas. Some are promoting Tijuana and Ciudad Juarez in hopes of luring Americans just across the border. And others recommend well-established tourist spots, such as Acapulco.

"It should be a Disney World with a casino -- family entertainment," said Eduard Markle, vice president of Gaming Consultants International Inc.

Mexican officials have been consulting with the company, involved in the construction of the New Orleans casino.

The Mexican Congress, which has the power to allow casinos, isn't making any immediate decisions.

Rodolfo Elizondo, president of the Chamber of Deputies' tourism committee, said no timetable had been set and no decision would be made until after careful "analysis, reflection, study and consensus."

The casino debate has been brewing for several months.

A June opinion poll in Mexico City's Reforma newspaper indicated that 51 percent of those surveyed disapproved of casinos and 47 percent wanted them.

Those opposed cited worries about drug traffic, organized crime, money laundering and prostitution.

Just days after the Reforma poll came out, a rival newspaper, Ovaciones, ran a banner headline that took up almost half the front page.

"WE WANT CASINOS!" it declared.

Casino supporters say strict laws keep mobsters and money launderers out of the gambling business.

And legal casinos put the illegal ones out of business, they say.

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