Adrian de la Garza, the prosecutor for Nuevo Leon state, told reporters outside the massive Casino Royale that the imprecise death toll could rise as rescue operations were still under way.
President Felipe Calderon condemned the attack, calling it an “abhorrent and barbaric act of terror” in a message on Twitter and expressing his solidarity with the people of Nuevo Leon, of which Monterrey is the capital.
Casinos in Monterrey have recently been targeted because some owners have refused to pay protection money demanded by criminal gangs linked to the country’s booming drugs trade, local media have reported.
A state official had earlier told AFP that the casino fire was sparked by a makeshift bomb, but a woman who survived the attack said men had doused the establishment with petrol and set it ablaze.
Nuevo Leon governor Rodrigo Medina said investigators believed six men were involved in the attack, and confirmed the establishment had been set on fire using some kind of flammable liquid.
Footage broadcast by Milenio television showed thick plumes of smoke emanating from the casino through holes made in the walls by firefighters.
The state head of civil protection, Jorge Camacho, told Milenio that most of the victims had died of smoke inhalation.
Only a few years ago, Monterrey had been seen as one of Mexico’s safest cities.
But Nuevo Leon state and its capital, which is home to four million people, have seen an increasing amount of drug-related violence, with more than 70 people killed in Monterrey last month alone.
Nearly 850 people were killed in the state in the first half of the year, compared to 278 murder victims for all of 2010, according to a tally by the national newspaper Reforma.
More than 41,000 people have died in violence linked to Mexico’s organized crime gangs since Calderon launched a military crackdown on them in December 2006, according to media counts and official figures.