Gambling on the Gold-Plated Lure of Casinos

FOLLOWING the lead of places like Atlantic City, N.J., and Biloxi, Miss., Mexico is about to heed the siren of casino gambling.

With unemployment at record highs, and with tourism experiencing less growth despite the cheaper peso, the vision of gaming halls filled with Mexican and foreign gamblers spending billions of dollars is fueling a strong push to legalize casinos.

A few voices are calling for Mexico to beware the dangers of corruption and money-laundering that could accompany casino development.

And some opponents say a country with so many spectacular archaeological sites and natural attractions should concentrate more on developing culture- and nature-based tourism.

But with most countries in the Caribbean basin already offering visitors slots and black jack, and with Mexicans themselves taking billions of dollars out of the country annually to drop in gambling meccas such as Las Vegas, many officials here see casinos as an inevitable addition to a country where tourism is a key factor in economic development.

The proposal to reverse the country's 48-year-old ban on casino gambling is not yet before the Mexican Congress. But the chairman of the lower house's tourism commission says legalization could be approved before 1996. If it is, he predicts $1.5 billion in new investment and 120,000 new jobs by the end of the decade.

"The Mexican public needs to realize that the conception, form, and image of casino gambling has changed much over recent years," says Rodolfo Elizondo, tourism commission president in Mexico's Chamber of Deputies. "For many people [gaming] has a dark or unprofessional image. But that's obsolete. It's not yet understood here as a motor of development and a source of foreign currency and new jobs."

Not everyone here sees the prospect of casinos in Cancun, Acapulco, or Cabo San Lucas in such positive light. Nor do opponents of casinos, who so far have been relatively quiet, consider their position to be outdated.

Last week, the country's largest business owners' and entrepreneurs' organization, Coparmex, came out in opposition to casino gambling. The group's president said it was a Pandora's box Mexico doesn't need.

"We have tremendous resources to tap," says Coparmex President Carlos Abascal. "Here we are taking sides on an issue that is not really going to do that much for tourism's development, but from which there would be many political, economic, and especially sociological risks."

Others say casino gambling could even constitute a threat to Mexico's identity.

"If other places in the Caribbean or the US need casinos to develop their tourism, maybe it's because they don't have the tremendous archaeological sites, the natural beauty and artisanry that Mexico offers," says Ifigenia Martinez, a member of Congress with the opposition Revolutionary Democratic Party. "We don't need to water down our uniqueness with something everyone else is doing."

Mexico leery of US involvement

In a country where foreign involvement and intervention - especially from the North - is always a touchy issue, the fact that American gaming companies are advising Mexican officials on casino development and lining up projects is also drawing fire. "The US companies may bring in some investment, but they will also take out a lot of money," says Ms. Martinez. "Their reasons for coming here wouldn't be altruistic."

If Mexico's tourism industry were going great guns, chances are that talk of casinos would remain just talk. But a recent government study on legalizing casinos notes that Mexico's hotel occupancy rate has been falling since 1992 to just over 50 percent in the first half of this year. Casino proponents say the country needs more diverse tourist offerings to attract more tourists, keep them here longer, and encourage them to spend more.

Casino gambling is an "interesting option that could mean an important increase in the number of tourists coming to our country," says Diodoro Carrasco, governor of Oaxaca state. Oaxaca, south of Mexico City along the Pacific coast, remains highly dependent on tourism.

"No one is talking about ignoring everything else for casinos," Mr. Elizondo says. "This is a discussion about diversification. I think we need more ecotourism, too, but we have to give tourists what they want." The government report estimates that casinos would attract 1.2 million more tourists to Mexico each year.

Noting, as many casino advocates here have lately, that Cuba could be the next Caribbean country to legalize gambling - and that sooner or later American tourists will be allowed to return to what was once one of their favorite vacation destinations - Elizondo says, "Can you imagine? We should be prepared for that day."

Concerns about crime

"Being prepared" would include passing gaming regulations to keep the new, lucrative industry out of the hands of Mexico's infamous drug kingpins and other organized crime groups. Critics already worried about rising levels of crime in Mexico say now is no time to open a new door to the drug cartels' money laundering. But others say that in the US expanded gambling has been kept "clean" through tough regulation - something they say also could be legislated in Mexico.

"Gaming is one of the most regulated industries in the US," Elizondo says. "And if you look at the American cities with casinos, you don't find higher crime rates. If anything, they are lower."

If casinos were approved, one of the most difficult decisions would be to choose which cities would be authorized to build them. Promoters acknowledge that limits would be necessary, in part to avoid the kind of saturation already visible in parts of the US, such as in New Orleans, where casinos are experiencing less business than anticipated.

In one study for the Mexican government, a US gaming firm recommended 10 casinos be built over five years, in most of the country's primary tourist destinations and in the larger cities bordering the US. The latter would supposedly draw gamblers from Texas and southern California.

Some of Mexico's hotel and restaurant owners are already worried about where the casinos would be built. Restaurateurs, already hit hard by the economic crisis, could take another blow from casinos that offer tourists cheap meals. Some hotel owners are calling for the casinos, if approved, to be built only in new resorts where they would not compete directly with existing facilities.

Elizondo says 10 sites may be too many for Mexico, but that a smaller number need not hurt existing businesses. Most of the arguments he hears against allowing casinos sound like only a fear of change, he says, "but that's like saying we shouldn't allow the Internet in Mexico because it's a sign of globalization.

"The fact is, gambling exists," he adds. "We just want to see if Mexico can benefit from it."