MEXICO CITY -- In Mexico’s messy casino industry, survival isn’t easy. The nation’s gaming laws are masterpieces of ambiguity, rivals use dubious legal tactics to undercut foes and chicanery is a practiced art.
Despite all that, a Colorado-based group that operates six casinos in Mexico has become a significant player. U.S.-owned Exciting Games runs the largest casino in greater Mexico City, and it has hopes of expanding.
President Gordon Burr, a former investment banker, says lax regulation is a challenge but that an even bigger worry is an ongoing battle with a rival who wants him out of business. Burr says the rival orchestrated a media campaign to make it falsely look as though his company had won last-minute favors from the previous government.
Burr and his four partners got into Mexican gaming in its early days, and their showcase Kash casino in Naucalpan, a Mexico City bedroom community, opened its doors in 2006. The casino has 830 slot machines and a sports-betting site, as well as a restaurant and live music venue.
Other casinos followed: two more in Mexico City and smaller casinos in Villahermosa, Puebla and Cuernavaca.
Strolling through Kash, Burr takes pride in the heavy security, tight enough that Mexicans feel safe dropping off older or physically challenged relatives to sit by the gaming floor and watch the kaleidoscope of lights. The casino has only electronic games, no live table poker or roulette.
Burr and his fellow U.S. investors plunged into Mexico thinking that the big global gaming companies – based in Las Vegas, Macau and Singapore – might come in later, perhaps even buying their business.
But the big Vegas boys have been spooked by the lack of clear gaming laws.
“Things are not as black and white in Mexico as far as interpretation of the law,” Burr said. “The regulations need to be tightened up.”
Burr, 63, worked in banking until he was in his 30s, then moved into private equity, he said. He and an eventual partner, John E. Conley, later met the son of a Louisiana entrepreneur, Leandrus “Lee” J. Young, a pioneer in gaming in Mexico.
Burr and Conley, who already had business experience in Mexico, studied Young’s Bella Vista casino in Monterrey in 2005 and came away struck by the potential, unaware that Young would soon be forced out of the business.
They plopped down a total of $12.5 million to operate under a gaming permit controlled by Young’s partner, and started building the Kash casino off a busy highway in Naucalpan.
“We didn’t market it,” Burr said. “We thought we were going to open the doors and be as successful as Lee Young was.”
That didn’t quite happen. Competition was getting fierce. But they kept building, three casinos in 2006 and more in later years.
Exciting Games is overshadowed by several bigger players, including the PlayCity chain owned by the Televisa conglomerate, and Caliente, the chain of Jorge Hank Rhon, a former Tijuana mayor and veteran of several run-ins with the law.
Burr said Exciting Games had operated within the law despite the legal chaos surrounding gaming: “We’ve stressed with all of our management team that this is to be run like a U.S. company.”
Still, they’ve watched with dismay at the explosion of casinos, many operating without federal permits but protected by judicial injunctions.