Mexico: Televisa increases its investments a 21% in games and draws despite IEPS

The segment is subject to the Special Tax on Production and Services (IEPS) from January 1st this year, as well as IVA, it is an indirect tax, which passes to the customers. Companies that operate business of this kind, calculate IEPS on a percentage on sales and, generally, pass the cost to the sales.

In total, the consortium will allocate the annual investment program for us$ 360 million, beyond the us$ 355 million last year, on incremental investments which, on top of the segment of games and draws, include the Triple Play segment (Internet services, telephone, and TV in just one package).

So, this year, the group will increase its investments an 8% in paid TV (cable and Internet) and telecommunications (telephone) to add us$ 85 million, compared to us$ 78.7 million in 2007. According to the report, Televisa will reduce its payment in the satellite TV business (Sky), of us$ 122.3 to 120 million.

Besides, in 2008, its investments in La Sexta, a channel in the open TV in Spain, where the group holds a 40%, will be 44.4 million euros, a decrease of 33% compared to last year.

Televisa entered in the betting business in 2006, with the opening of five bingo halls and sportsbooks under the name "Play City" and today also operates the “multi-game” system, a lottery game in line with access to an electronic Terminal in national network. The company expects to open 65 bingo halls and sports books in the following eight years.

In Mexico, the games and draws industry has a capacity installed equivalent to 30,000 electronic bingo machines, although several analysis of the sector indicate that the activity will achieve its maturation point once it reaches a level of 180,000 machines.

In the first quarter 2008, Televisa reported a consolidated income of us$ 924 million, a 16.4% growth, compared to the same period in 2007. Cable and Telecommunications was the segment which grew the most (90.8%) in the period, due to the acquisition of Bestel and a growth in the subscribers to video, data and telephone.

Televisa is the biggest Latin media company worldwide. Through subsidiaries and strategic association, it produces and broadcasts TV programs, and distributes TV programs for the national and international market.

It also develops and operates TV services direct to home via satellite and distributes publications, supplies cable TV services; produces and broadcasts radio programs, promotes sporting events and participates in the games and draws industry.