Mexico proposes gambling tax hike from 30% to 50% of GGR
Summary
Mexico’s finance minister, Édgar Amador, has proposed raising the Special Tax on Production and Services (IEPS) applied to gambling and lottery games from 30% to 50% of gross gaming revenue (GGR) as part of the 2026 Economic Package. The increase would cover both land-based casinos and digital platforms, including services offered by foreign operators without Mexican tax residence.
The package also introduces new “healthy taxes”, including an 8% IEPS on video games with violent or adult content that are unsuitable for under-18s, and aims to boost revenues to reduce Mexico’s budget deficit. The Finance Ministry projects MX$8.7tn total revenue in 2026, with tax collections making up MX$5.8tn. The budget timetable requires the Chamber of Deputies to approve the budget by 20 October, and the Senate to review the Revenue Law by 31 October.
Operators already face corporate income tax (30% ISR), local and state levies, regulatory fees and other charges. The proposed rise would further increase an already heavy fiscal burden. The move comes amid a slow process to modernise Mexico’s 1947 Federal Gaming and Lottery Law and as online gaming is projected to overtake land-based revenue by end-2025.
Key Points
- Proposal: IEPS on gambling would increase from 30% to 50% of GGR for 2026.
- Scope: Applies to brick-and-mortar casinos, online platforms and foreign operators without Mexican tax residence.
- New video game tax: 8% IEPS on games with violent or adult content, covering physical and digital sales and in‑game purchases.
- Fiscal aim: Part of “healthy taxes” to raise revenue and reduce the fiscal deficit; Ministry forecasts MX$8.7tn total revenue in 2026.
- Existing burden: Operators already pay 30% corporate tax, state/local sales taxes (around 6%) and other consumption or prize levies; deductions limited.
- Regulatory context: Industry operates under a 1947 law; modernisation efforts exist but are progressing slowly and may be deprioritised amid economic pressures.
- Market impact: Online revenue is expected to surpass land-based by end-2025, so the tax will heavily affect digital operator margins and market dynamics.
Context and relevance
This proposal is highly relevant to operators, investors, affiliates and suppliers active in Mexico or with expansion plans in LatAm. A 20 percentage-point increase in IEPS is material: it reduces operator margin directly on GGR, may change pricing, promotions and market viability, and could prompt structural shifts such as consolidation, exit of smaller operators or higher player costs.
It also signals a political willingness to target “sin” and digital consumption for revenue, aligning gambling with tobacco and sugary drinks in Mexico’s tax policy. For policy watchers, the measure highlights the tension between modernising gambling regulation and short‑term fiscal needs. The timeline for budget approval means the industry has a limited window to organise lobbying or mitigation strategies.
Why should I read this?
Short version: if you work in iGaming, run casinos, invest in the Mexican market or place bets on LatAm growth — this matters. A jump to 50% GGR will bite margins hard, change commercial maths and could force quick strategy tweaks. Read the detail so you know whether to cut offers, revise forecasts or join whatever industry response is being organised.
Author style
Punchy: this is a big, fast-moving fiscal shift that could reshuffle Mexico’s gaming landscape. Operators and investors need to pay attention now — the numbers are stark and the timetable tight.
Source
Source: https://next.io/news/regulation/mexico-proposes-gambling-tax-increase/