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MEXICO: TAXATION
Report by James Kilsby
Financial crisis fuels gaming tax rise fears
Mexican gambling operators are planning a
fresh lobbying offensive to urge Congress to
resist President Felipe Calderón’s likely
budget proposal to double gaming taxes
from 20 to 40 per cent of net win. Will
Mexico double their money or hold?
aced with declin- ation (APJS), which represents
F
ing oil prices and local operators including Tele-
Mexico’s tilt into visa’s Apuestas Interna-
sharp recession, cionales, Caliente Group and
President CIE. “This would, of course, put
Calderón is believed to be us in a very difficult situation.”
eyeing the gaming sector as a Mexico’s gambling industry
potential source of fresh tax has grown considerably since
revenues to shore up the a 2004 law effectively autho-
country’s national budget. rised the granting of licences
The proposed gaming tax for hundreds of new bingo and
hike is unlikely to be con- off-track betting parlours, as
firmed until President well as the operation of elec-
Calderón presents his formal tronic gaming machines.
budget plan to the Mexican With the gambling sector
Senate and Chamber of developing, President
Deputies. Calderón first introduced the executive branch of govern- time, we are very worried.” Mexico may be downgraded VAT to medicines and food.
However, the prospect has specific 20 per cent gaming ment to drop this proposal President Calderón has on its national debt if it fails to And these measures - together
already caused consternation tax following his 2006 elec- then we will have to fight it in been urged to use the second- diversify its revenue stream. with gaming tax hikes - are
among domestic operators, tion victory. Congress,” Pérez told Gam- half of his six-year mandate to However, President likely to prove unpopular
who warn that gambling busi- Gambling operators at the blingCompliance. “In Macau, further reduce the Mexican Calderón’s budget plans will among members of the PAN’s
nesses would struggle to time cautiously welcomed you have a huge net win per government’s dependency ultimately hinge upon the main opposition party, the
comply with such a sharp tax the move as a sign of the machine ratio, which we on oil for its revenues by president garnering support PRI, according to Pérez.
increase as they, too, face up to industry’s growing credibility don’t have here.” implementing a second bout in the Congress, where his “The PRI has been saying
the twin challenges of the eco- as a regulated sector within “We understand we have to of major fiscal reforms. party, the PAN, lost control of that the government cannot
nomic downturn and the the Mexican economy. But be taxed,” Pérez added, refer- An annual report delivered the lower house in this just increase taxes without
swine flu outbreak. they are likely to be less ring to President Calderón’s by the president confirmed summer’s mid-term elec- first reducing spending, so
“Unfortunately, there is a accommodating of a gaming initial 2007 tax move that ulti- that government revenues tions. fortunately we have the PRI
very big possibility that tax rate even above the 39 per mately saw the government were down 17.2 per cent for Also set to be proposed in on our side on this issue,”
gaming taxes could be cent in place in the Chinese go back on its original sugges- the first half of the year, prima- Calderón’s budget are tax Pérez said. “[The gaming tax
increased dramatically,” said gambling Mecca of Macau, tion to bring in the full 20 per rily due to the drop in global increases on cigarettes and proposal] still has to go
Alfonso Pérez Lizaur, president according to Pérez. cent rate only in incremental oil prices, while Standard and alcohol, as well as a highly- through Congress and we will
of the Mexican Gaming Associ- “If we cannot persuade the steps up until 2012. “This Poor’s has warned that controversial plan to apply try to fight it there.”
Open Letter
MACHINES SEIZED
Piotr Wiecha from Polish trade publication Interplay has responded to
POLAND
an article published recently in Games World concerning the state of
the market in his home country.
O
n 24 February 2009, homologated because the state anything about mul- seized 300 machines down well with the press. tion by duty officers regu-
the Ministry of Ministry authorities simply tiplying wins. In other across the country from Headlines such as “Great larly.
Finance changed did not know how to words, all existing almost every operator in a Success of Police” and The action was, in my
regulations on homologat- homologate them. The machines which had been single day - including the “One-armed bandits opinion, taken unneces-
ing AWP machines in Polish media jumped upon homologated before 24 money collected in the illegal” were abundant. sarily. It can be compared
Poland. It effectively this, stating that all AWP February were legal. Fur- cashboxes. The big problem, in my with putting somebody in
removed the ability to machines were therefore thermore, all homologated To this day, none of view, is that everything prison, then after several
gamble (i.e. double or illegal, because players machines are permitted to these machines have been about the seized machines years letting them out
nothing) from the winnings could win more than E15 stay in the marketplace for returned to the operators. is 100 per cent legal. Every because you have no proof
bank. on them. six years. Furthermore, operators last one of the machines of their guilt.
This move brought The truth is that the law Then, for no apparent must pay E180 in tax every taken by the CBS were The case, as far as I’m
chaos to the market, as permitted a E15 win in one reason, the CBS (Central month for each machine. homologated by the min- concerned, is really a
none of the machines were game, but did not overtly Bureau of Investigation) The CBS saw their move go istry then checked on loca- scandal.
GamesWorld | 26 | October 2009
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