International edition
September 18, 2020

The Congress evaluates to increase it from 2% to 20%

Mexico: Televisa and CIE could be harmed by the new gambling tax

(Mexico).- Due to the proposal to increment taxes a 20% in sales generated by bets and games of chance, the balance of Televisa and Corporación Interamericana de Entretenimiento (CIE) will suffer a strong setback.

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nalysts explained that, altough the business represents less than 1% in Televisa operating flow, it is at least the 33% of CIE, however, both firms have ambicious plans to grow in this segment.

“No doubt this tax will affect us, however, to assess the magnitude, first you have to see how will it be composed and the way the possible approval will evolve”, said Jacob Morett, PPRR Corporative Deputy Director of CIE.

These are no good news for the two companies, because both are considering this business as a potencial way for the diversification and growth of operations.

CIE is concentrating its operation towards games of chance business after obtaining license to operate 20 additional betting centres to the already 45 existing, and, after the agreement reached with its partner Codere to acquire 50% of Sportbooks and Yaks operations, on exchange for the operation of Las Américas complex.

Meanwhile, Televisa, besides the release of games of chance, features plans to operate the concept created with Play City. However, analysts agreed that the betting business,

besides having a strong growth potencial for Mexican companies, is also a service in which the impact of the prices is not as strong as the demand.

Additionally, Carlos González, Ixe analyst, warned that the offer of a complete concept in games of chance by the companies is a factor that will support its performance.

According to Martín Lara, Santander analyst, altough it is clear that CIE will be more affected than Televisa due to the importance of the games and bets segment in its operative flow, it is neccesary to know the details of the amendment on the matter in order to know the magnitude of this tax.

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