said.
One survivor said the group of masked gunmen burst inside the Casino Royale in the prosperous industrial city of Monterrey on Thursday afternoon (local time) and threatened gamblers, then sprayed petrol on the carpets and set fire to the place.
Another witness said people stampeded after hearing blasts inside the casino shortly after the attackers stormed in. Many patrons ran to hide in the toilets but died from asphyxiation as smoke engulfed the casino, a rescue official said.
Rodrigo Medina, governor of Nuevo Leon state, told the Televisa television network that 53 people were killed, and rescue teams warned the death toll could rise. It was one of the worst attacks in a major Mexican city in many years.
Monterrey is a relatively wealthy city of about 4 million people and was for many years seen as a model of economic development but it has been ravaged by violence over the past two years as Mexico's drugs war has escalated.
President Felipe Calderon called the attack a "barbaric act of terror" and vowed to keep fighting organized crime.
About 42,000 people have been killed in the drugs war across Mexico since he took office in late 2006 and deployed troops against the drug cartels.
Rival drug gangs are fighting for control of Monterrey, which lies 230 km (140 miles) from the Texas border, and they routinely extort casinos and other businesses, threatening attacks if the owners refuse to pay up.
Televisa said there were reports that up to 20 more bodies might still be trapped in the debris of the casino. Paramedics and firemen pulled out bodies covered with plastic bags from a hole in the wall of the casino as night fell.
Relatives of people trapped inside the building lined up to demand information while others used social media to start their own searches.
"My wife came here for a celebration ... She was having dinner with her friends," a weeping, unidentified man told Milenio TV.
"My sister was working inside as a waitress," said another man. "I know nothing about her, there is only confusion."
National security spokesman Alejandro Poire said the government would do everything within its reach to stop the violence and capture those responsible for the casino attack.
Rescuers used an excavator from a nearby construction site to break through a casino wall to search for victims.
Twitter users in Monterrey reported scenes of chaos on the streets around the Casino Royale after the attack and heavy army presence.
Casinos have become popular in Mexico and a number of them have been attacked in recent years. Milenio newspaper said on Thursday that a casino in the state of Coahuila was attacked by a group of armed men.
