Men with assault rifles stormed the billiard hall at the El Jarras bar in Tarimoro in the Mexican state of Guanajuato at around 9pm local time (3am BST).
The sound of gunfire was heard by neighbours and police soon arrived to find nine bodies strewn across the floor and "riddled with bullets," according to Mexican publication El Universal.
Nine people died instantly scene and one more died later in hospital.
Minutes after the attack, a video recorded by the attackers was broadcast on social networks and the horrifying footage shows bodies lying on the ground with a note on the floor.
The murderers left two cards signed by the criminal group Cartel de Santa Rosa de Lima, who claimed responsibility.
The killers fled in cars to an unknown destination once they completed their shooting spree.
The messages contain the distinctive triangular symbol which indicates their leader José Antonio Yépez Ortíz, alias Marro.
Local media reports that drugs from the Jalisco Nueva Generación Cartel were sold within the business, which is why the attack could have been carried out.
The Santa Rosa cartel has been fighting turf battles against the Jalisco cartel for years.
Cartel-related violence has gripped the country for years, but since 2006 has left more than 340,000 dead after the Government launched a controversial anti-drug operation with federal troops.
The Jalisco New Generation Cartel is a semi-militarized Mexican criminal group which is headed by one of the world's most-wanted drug lords, Nemesio Oseguera Cervantes.
The Mexican National Guard as well as the army are carrying out patrols to track down suspects and have launched an investigation.
Tarimoro, a small town of fewer than 36,000 people, is in the south of Guanajuato state in central Mexico, 120 miles northwest of the capital Mexico City.