“The country has too many casinos,” Burr said.
“They are illegal,” Conley interjected, referring to pirate operators.
The two think that their management team and their 1,000 or employees are better trained than competitors’ are, but they’ve tabled plans to expand.
“We were prepared to invest as much as $50 million,” Burr said. “We’d like to expand our operations and do some hotel and casino operations together.”
But for now, Exciting Games is ensnarled in a legal skirmish with the former Mexican partner of Lee Young, Juan Jose Rojas-Cardona, a man dubbed the “Casino Czar” by the Mexican press because he’s behind more than two dozen gaming halls and enjoys powerful political connections.
Unable to get its own federal gaming permit, Exciting Games entered Mexico by paying Rojas-Cardona’s business to operate under its permit. Only after signing a contract with Rojas-Cardona’s firm did Burr learn of the Mexican’s brushes with the law, including an arrest for having 17 pounds of marijuana in his rental car trunk in New Mexico in 1994. By late last decade, Rojas-Cardona had sour relationships not only with Exciting Games but also with several other foreign investors.
In a sign of the bad feeling, Rojas-Cardona’s company, Emex Holdings LLC, defrauded a Chippewa Indian tribe from Michigan’s Upper Peninsula of more than $6 million, according to the tribe’s suit in U.S. court. A London-based hedge fund, BlueCrest Capital, claims it lost a $75 million investment in Rojas-Cardona’s company.
Burr has difficulty bringing himself even to mention Rojas-Cardona’s name.
“We have had a very adversarial relationship with a guy who’s caused us a great deal of problems,” Burr said. “He’s very powerful, very wealthy, and he’s had a unique ability to achieve results.”
Burr is convinced that Rojas-Cardona is behind news leaks about a last-minute approval of casino permits under the government of President Felipe Calderon, who left office Dec. 1. In the final hours of Calderon’s government, the Web page of the gaming and lottery bureau of the Interior Secretariat reflected that Exciting Games had been issued permits for 14 casinos and sports book centers, and a second operator, Producciones Moviles, had won permits for 80 casinos.
According to Burr, it’s a mystery why the permits registered on the Web page in the final moments of the Calderon administration when Exciting Games had received written notification of approval in mid-August. He claimed that the action, whether nefarious or not, obscured his company’s three-year campaign to win a federal permit in its own name.
The tussle is so bitter and the stakes so high that neither Burr nor Conley wanted his photo taken, for security reasons. They seek to sever relations with Rojas-Cardona’s group, saying a judge’s ruling declaring it in bankruptcy releases Exciting Games from any contractual obligations or royalty payments.
In a sign of the go-for-broke battle, a trusted legal adviser to Exciting Games, Alfredo Moreno Quijano, faced an arrest warrant on fraud charges last fall.
In Mexico, civil litigants may appeal to judges to have their legal foes jailed, and Burr said the arrest warrant for Moreno was part of the hardball dispute about whether his company could break its contract with Rojas-Cardona’s company.
A spokesman for Rojas-Cardona’s business, Eduardo A. Campos, said the firm believed that Exciting Games had obtained its Dec. 1 federal permit illegally and should continue to pay royalties.
“They shouldn’t be operating,” Campos said.
Only one other U.S. company has an interest in gaming in Mexico. Playboy Enterprises Inc. is a partner with Rojas-Cardona’s firm in a Playboy Club casino in Cancun, the Caribbean tourism hub.
Officials under President Enrique Pena Nieto say they’ll review procedures for gaming permits, and several lawmakers say they may push for a top-to-bottom shake-up of who may operate.
Burr said he welcomed any effort to bring order to gaming.
“We hope that they do a great job not only with the industry but also with the country,” he said.