Mexico – Mexico Chamber of Deputies approves lottery mergerBy Phil - 23 October 2019
The Plenary of the Chamber of Deputies has approved, with 392 votes in favour, one against and no abstentions, to repeal Mexico’s Lottery Laws and merge La Lotería Nacional para la Asistencia Pública (LOTENAL) with the other state lottery Pronósticos para la Asistencia Pública (Pronósticos).
The opinion, which was sent to the Senate, establishes that the National Lottery will retain its exclusive legal jurisdiction for the purposes of the merger divestment process when it comes to the applicable administrative and budgetary provisions and clarifies that workers’ rights will be respected.
According to the transitory regime Pronósticos will assume the organisation and uninterrupted lottery draws and contests that the National Lottery for Public Assistance made before the entry into force of the decree. The Ministry of Finance and Public Credit (SHCP) will be the coordinating agency which will along with the Ministry of Public Administration take the necessary actions so that human resources are transferred to Pronósticos.
During her presentation, the president of the Government and Population Commission, Rocío Barrera, stressed that after the merger the name of the National Lottery will be maintained.
In July President Andrés Manuel López Obrador confirmed that two of Mexico’s lotteries will merge creating one of the largest lotteries in the region. The sales for Pronósticos are higher and its sales network is much more advanced than LOTENAL, sales for which have been in decline for over ten years.
The merger of both agencies is aimed at reversing LOTENAL’s deficit which was generated from 2008, when the Special Excise Tax on Production and Services (IEPS) was imposed on the lottery. The IEPS tax is imposed on certain products which are deemed harmful in some way to the population or environment such as soft drinks, cigarettes, alcohol and petrol and is already imposed on casinos.
In 2015 Mexico’s Chief Audit Office confirmed that LOTENAL was in a state of growing crisis, since the lottery had stopped making donations to public charities and was dependent on government money so that it could remain afloat and even pay out prizes in some cases. As a result the Audit Office advised that the Executive branch dissolve the lottery altogether because it had failed to comply with its mandate which was to raise money for charitable causes.
However the government for some time has been seeking another solution and rather than scrapping the lottery altogether the government has been looking into the viability of eventually merging LOTENAL with Pronósticos.