Mexico’s President Enrique Peña Nieto has issued a decree aimed at reining in the proliferation of slot machines in the country.
Slots have been at the center of licensing abuses nationwide that have generated a spate of scandals in recent years as their numbers have spread to the extent that they now crowd the sidewalks in front of shops. The blame has focused on license holders, who have been renting or ceding operating rights to third parties, a practice that is prohibited under the decree, which also bans slots outside of licensed establishments and outlaws all so-called skills-based games. The decree also shortens the duration of operating permits from 40 years to 25.
Coin-operated video and charity games at fairs are exempted from the new rules.
Las Vegas-based investment analysts Union Gaming Research, which covers the stocks of several major equipment manufacturers supplying the Mexican market, says the decree is not expected to affect suppliers, as they have been pulling games out in recent years in response to the murky regulatory environment and declining play levels. They are continuing to sell or lease a limited numbers of games, however.
“While the current legal situation is a bit confusing we don’t think the crackdown is a major risk from an EPS perspective,” the firm said in a note to investors.