Following the tragic events in Monterrey, lessons need to be learned, Roger Tomas tells InterGaming

The sickening arson attack on the Casino Royale in Monterrey, Mexico, has raised concerns over the safety of running gaming operations in a country that has seen organised crime and drug-related violence escalate in recent years. The suggestion from those close to the incident, which claimed the lives of more than 50 people, is that gangs in this city at least have been putting gaming operators under pressure to pay protection money. The image of fire crews extinguishing August’s casino blaze is at odds with a gaming market that is quickly becoming among the most sophisticated in the world.

It lacks clear regulation, however, and licensing procedures vary, it seems, case by case. Until a framework of new, up-to-date regulations is put in place, Mexico’s rapidly growing gaming market runs the risk of boiling over, which may force the government to take the kind of drastic steps seen in both Russia and Ukraine.

Of course, it would be easy for the government to issue a reactionary response to the events in Monterrey. Thankfully the initial inquest into the events is addressing the wider problem of corruption and gang crime, rather than the perceived evils of gambling. Hopefully it will spur the government into action and the legislative changes that have been suggested in recent years will finally come to fruition.

There is positive news, though. Only a few weeks after the Casino Royale fire, Tomas Tapies Harrison Gaming and Grupo Orenes-Franco announced a new agreement under which they will jointly develop new casino opportunities in Latin America, focusing initially on the burgeoning Mexican market.

Having enjoyed significant success in its native Spain, where it operates seven casinos and 80 gaming parlours, Grupo Orenes-Franco is now planning to expand internationally. TTH Gaming, meanwhile, specialises in the management of casinos in Latin America and, among its partners, it has over 50 years of management and direct operational experience in a host of countries, including Mexico, Colombia, Argentina, Peru, Dominican Republic and Venezuela.

“The Mexican market has to triple,” Roger Tomas told InterGaming. “That would seem a strong prediction but it’s just a question of figures, statistics and demographics. Mexico has a population of 110-120 million people but if we compare the number of machines per 1,000 inhabitants to other countries, the ratio in Mexico is very low. It’s just starting - the Mexican market has to be able to absorb 300,000 machines and today there are less than 100,000.”

TTH Gaming and Grupo Orenes-Franco are the latest international casino operators to join the Mexican market, highlighting the immense potential that it offers. As more internationally-focused corporations enter the region, bringing the standard of operations upwards and hopefully bringing local operators along with them, the market will become a much more settled environment. Attracting further international investment, however, hinges on whether the government demonstrates that it too is committed to the responsible expansion of the country’s gaming industry.

“Orenes decided in this case to play safe,” continued Tomas, “to not risk operations in new cities, new markets and new locations and to wait for one or two years to have a mature market.”

This means steering clear of Monterrey and much of the north-eastern part of the country. TTH Gaming has been involved in operations in Mexico since 2006, only a year or two after the first legal casino-style properties were opened there.

“We bring a lot of specialised expertise in operating casinos in Latin America,” Tomas said. “We know in Mexico who is who, what scary things you can find in every place, what good things you can find in every city, who are good local partners, who are not trustworthy local partners - and that’s very important.”

Orenes, he said, has been focused on Spain in the past and now it is seeking to move into the international marketplace, it needs a local partner that it can rely on to ease this transition.

“Orenes now wants to move into the country quickly and avoid all these unpleasant surprises that arise when you go international,” Tomas explained. “That’s normal, it happens to every company that tries to enter any new market and any sector. These things happen and minimising those risks is what we can offer Orenes.”

Tomas believes that there are important lessons to be learned from the attack in Monterrey, particularly as the spotlight is now on the industry. What is needed, he said, is a change in the law.

“The Mexican law was made in 1948 so it’s already 63 years old. It is totally obsolete.”

There are also deep-rooted problems with the way that licences are granted, almost arbitrarily, by the authorities. Licence holders are not always the gaming entrepreneurs you’d expect, but businessmen who simply rent them out to others hoping to operate casinos. This situation is prompting many companies that have been refused the necessary permits - even though they fulfil the criteria set out by the law - to pursue the matter through the courts.

“In the end, gaming companies go to the courts and get a licence through the court system, which is not ideal,” said Tomas. “When that happens, sometimes they get more than they should. For instance, there are some judges that say you can also run live table games, which is forbidden under the law, or you don’t have to pay taxes because you’re not recognised by the authorities.

“The whole market is in chaos. There definitely needs to be a new law and in fact, with this terrible thing that happened, the authorities have said that the 1948 law is obsolete and there should be a new one.”