Mexico has begun to crack down on its illegal gambling industry following scores of deaths in a casino arson attack, but evidence suggests that problem goes deep, and will take more than the closing of a few gaming houses.

Following the firebombing of an illegal Monterrey casino which killed at least 52 people, the federal government has responded swiftly, investigating and shutting down unlicensed casinos throughout the country. According to the Interior Ministry, as of October 3 authorities had opened investigations into 69 gaming houses in Mexico, closing 19 for lacking the proper documentation. In the state of Nuevo Leon — of which Monterrey is the capital — state legislators have been even more severe on the industry. On October 19, the northern state’s Chamber of Deputies voted unanimously to place a moratorium on the issuance of casino licenses.

As InSight Crime has reported, Mexico’s gambling industry (both licensed and non-licensed) is permeated by organized crime. Much of this has to do with the fact that casinos offer an useful outlet for money laundering. Due to the large inflows of cash that gambling brings, and the difficulties of monitoring wins and losses, it is relatively easy to use casinos to disguise the source of illicit funds.

At least partly because of its utility to criminal groups, the industry has witnessed tremendous growth in the past few years. According to Proceso magazine, the number of gaming houses in Mexico has jumped from 198 to 790 since President Felipe Calderon took office in 2006, and the magazine estimates that many are unlicensed. The business also breeds a cutthroat environment, in which casino owners have been known to order hits on their rivals in order to maintain their hold on the market.

Considering the extent of criminal involvement in the industry, the recent crackdown is a positive step. However, the problems associated with illegal casinos go much deeper than the businesses themselves. In the wake of the August 25 casino fire, blame for the incident focused on the Zetas, who allegedly carried out the attack. After the fire, authorities claimed that the casino was likely targeted because it lacked a proper gaming license, and that the Zetas were presumably offering “protection” from federal regulatory officials. While this may be the case, it ignores the role that other, more institutional actors play in this process.

An illustration of this occurred several days after the incident, when Grupo Reforma published a video showing the brother of the mayor of Monterrey, Fernando Larrazabal, entering a different Monterrey casino and accepting a stack of bills disguised in a cell phone box from someone who appeared to be a manager. When asked about the affair, Larrazabal seemed taken aback, and claimed that the money was for “cheese” and other goods he had sold to the casino. Since then the mayor has come under increasing suspicion from public prosecutors, and officials from his National Action Party (PAN) have called for him to step down, but to no avail.