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Legalizing Casinos in Mexico

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Legalizing Casinos has been a widely discussed topic among Mexican legislators in the past 20 years. The public has not been involved in this discussion to avoid social disorder. However, there are several studies that have been made by the Division of Economy and Commerce and the Chamber of Deputies to analyze the viability of such project. The debate basically rises from placing the economical benefits and the social concerns in a scale; legislators have not been able to decide which are greater. This paper will focus on the economical benefits based on one particular proposal made by Mexican depute, Marcial Reyes, to the Mexican Division of Economy and Commerce in 2004 and on the main social concerns related to casino legalization gathered from various sources. While the decision will be controversial, I firmly believe that the pros greatly surpass the cons to legalizing casinos in Mexico. Furthermore, most of the concerns are either, not well based or easily handled with proper legislation. However, I would not recommend legalizing casinos at the moment because there are other priorities at stake such as dealing with drug wars.


Economic Benefits:

Reyes' proposal, "Installation and Operation of Casinos in Mexico", consists of building and operating a total of 19 through 26 casinos in Mexico's mayor tourist destinations. If this study is implemented, and legislators agree to make casinos a completely legitimate activity, the first thing to look into is how would the casinos come about? The answer is simple, through millions of dollars worth of investment. Each casino requires an investment of 70 to 100 million dollars. Out of which, according to the Mexican law, at least 51% of the capital must come from a Mexican party and the remaining 49% or so would come in the form of Foreign Direct Investment (FDI). This way the government would be promoting Mexican entrepreneurships and foreign direct investment, which will consequently increase the cash flow in the Mexican economy. How? Well, if 51% of the capital came from Mexican investors then 51% of the profits would go right back to them. This money is then spent paying taxes and in the particular needs of each investor. Presumably, they will buy most of their goods inside the country and therefore money re-enters the Mexican government and the Mexican society increasing the flow of currency within the country. Out of the remaining 49%, some of it will remain in Mexico through taxes and unfortunately the rest would go to the home country of the foreign investors. However, the original 70



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