Mexico

MEXICAN CHAMBER OF COMMERCE GREEN LIGHTS LOTTERY MERGER

In a near-unanimous decision, the Plenary of the Chamber of Deputies approved a decision to repeal the current lottery laws in Mexico, allowing for the merger of La Lotería Nacional para la AsistenciaPública (LOTENAL) with the other state-approved lottery, Pronósticos para la AsistenciaPública (Pronósticos). The decision was approved by a vote of 392 to 1 with no abstentions. The opinion was forwarded to the state senate.

The new decision reaffirms that the national lottery will retain its exclusive legal right and jurisdiction, granting the merger divestment process once it reaches the appropriate administrative and budgetary provisions. There must also be a clarification on how the rights of workers will be respected and protected during this merger process.

While these issues or concerns, the growing concern is in regards to ensuring that the lottery is not interrupted in any way while the merger is being completed. Assurances were made that LOTENAL will continue and remain in full force.

To help assist in the process, the Ministry of Finance and Public Credit (SHCP) will be partnering and coordinating with the Ministry of Public Administration and any other additional agencies that are deemed necessary to ensure that transfers of employees will move smoothly to Pronósticos to keep the lottery functioning as usual.

During a presentation by Rocío Barrera, the president of the Government and Population Commission, she explained that once the merger is fully implemented that the National Lottery name will still be used. This was an issue ever since Mexican Pesident Andrés Manuel López Obrador confirmed in July that the two lotteries would be merging creating one of the largest lotteries in the region.

The move appeared to make a lot of sense. Sales for Pronósticos are significantly higher than that of LOTENAL, both in number and monetary volume. This comes at a time where LOTENAL has seen its sales drop steadily over the last decade.

The hope is that this merger will quickly reverse the steady decline that has been occurring at LOTENAL since 2008. This was the year that the Special Excise Tax on Production and Services (IEPS) was imposed on the lottery companies,  as well as other products and services that were deemed harmful in some way to the public or the environment. This included such things as gas, soft drinks, and cigarettes.

That tax had a detrimental effect on LOTENAL which was not overcome, necessitating the merger.




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