Beatrice Rangel, director of corporate strategies and institutional relations, Codere

This is a very interesting time for the Mexican gaming industry. In February, the Federal Competition Commission of Mexico approved plans for two of the country’s largest gaming operators, Grupo Caliente and Spanish gaming group Codere, to further consolidate their position within the market. Under the terms of their agreement, Codere Mexico acquired a 67.3 per cent stake in Grupo Caliente, Jomaharho and Grupo Inverjuego. Caliente, in return, gained a 32.7 per cent stake in Mio Games and Promojuegos, both currently owned by Codere.

Beatrice Rangel, director of corporate strategies and institutional relations at Codere, believes the commission’s announcement is a significant milestone in the Mexican market’s development.

“This resolution from the Mexican authority is an important precedent in the responsible gaming and healthy entertainment industry and will be useful to influence the design and review of public policies in the matter,” she tells InterGaming.

Codere has been present in Mexico for 13 years and employs approximately 8,000 members of staff. In terms of EBITDA, it is now the second most important market for the company after Argentina. With the acquisition of its stake in Caliente, Codere’s Mexican subsidiary is now present in 73 locations and - through its relationships with Caliente and Campania Interamericana de Entretenimiento - is currently the largest operator of gaming venues in the country. As a result of these joint ventures, the group now manages a total of 107 bingo halls and 47 betting locations.

“Mexico is a very interesting growing market for any investor,” says Rangel. “After the operation authorisation by the CFC, Mexico will compete with Argentina to become number one in the internal Codere ranking.”

This year, Codere is planning to invest €170m ($244m) in its businesses globally, with 11 per cent of this earmarked for its operations in Mexico. According to Rangel, the company continues to evaluate each opportunity in the market as part of its overall strategy for growth.

“The Mexican gaming market’s growing potential over the short and medium term is encouraging,” she explains. “Mexico, with its country trademark related to tourism, is attractive not only for its diverse cultural and geographical offering, as well as the charming personality of Mexicans, but also for the entertainment offering. Codere feels that these conditions are the key attractors for investing in the industry.”

The people of Mexico, however, are the key to the market’s success, she states. “A big part of our investments are in human capital. Mexico has a population that learns quickly and has an entrepreneurial spirit. That human capital is very attractive for us and because of it we have considered training and professional development programmes that represent nearly 30 per cent of our investment plans in the country.”

Mexico’s gaming laws have remained almost unchanged since the 1947 Federal Law of Games and Drawings was passed, outlining those activities deemed suitable and those to be outlawed. Thanks to new interpretations of the law in recent years, gaming halls in Mexico are very much casinos by another name. Class III gaming machines were introduced in 2009 and electronic table games have been installed in numerous properties. Live table games are expected to be the next step.

There are ongoing attempts at a federal level to modernise the country’s gaming regulations and in March this year, Senator Felipe Gonzalez proposed a bill aimed at strengthening the law and more clearly defining the types of games permitted. Establishing a modern framework of regulation is key to ensuring the Mexican market moves towards greater maturity.

“The Asociacion de Permisionarios de Juegos y Sorteos, the industry and the authorities are specialists in the matter,” says Rangel. “We, along with the industry, are working towards efficient regulation that is at the same level as countries that have the best practices for responsible gaming industries. Mexico is not the exception.”

Mexican players are proving to be among the most discerning when it comes to the games they choose to play. The influx of new machines and concepts has broadened the country’s gaming offering to meet the requirements of an increasingly demanding and savvy audience.

“The response from Mexican customers has been very positive to Class III-type machines,” Rangel explains, adding that because the market is attracting international operators and suppliers, players are developing ever-more sophisticated tastes.

“Competition always brings the best options for the customers, as well as the best technology available. We are living it right now with options like progressive jackpots, mysteries and wide area progressives.”  

This month, the international casino community will descend on Mexico City for the fourth edition of the Latin American Gaming Fair, ELA. The decision last year to allow Class III games in Mexican gaming halls prompted a host of international manufacturers and suppliers to exhibit at the show in an attempt to persuade operators, such as Codere, to choose their games. This year, the organisers of the show anticipate a shift towards live gaming, with roulette, craps and sic bo expected to be hot topics of discussion.

As Rangel suggests, the exhibition, which takes place on May 4-5 at Centro Banamex, has come to reflect the market as a whole, providing a snapshot of the industry as it develops into one of the most strategically important sectors of the global industry.

“ELA 2011 demonstartes the maturity of the gaming business in Mexico,” she asserts, “a country that is becoming a regional focus for operators, suppliers and authorities.

“These international shows allow many analysts and managers to interact with the most new products in the industry.”