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 lotteries from 30% to 50% of gross gaming revenue (GGR) as part of the 2026 Economic Package. The rise would affect both land-based casinos and online platforms, including services offered by foreign operators without Mexican tax residence.
The tax increase is packaged with other so-called “healthy taxes”, notably an 8% IEPS on video games deemed violent or adult-rated, covering physical sales and digital in‑game purchases. The Ministry of Finance says the measures will help reduce the fiscal deficit as it projects MX$8.7tn total revenue in 2026, with tax receipts of MX$5.8tn. The legislative timetable requires budget approval in October–November 2025 if the normal schedule is followed.
Key Points
- The IEPS gambling rate would rise from 30% to 50% of GGR, hitting both casinos and online betting platforms.
- Foreign operators without Mexican tax residence would also be captured by the proposed levy.
- The 50% hike is part of a wider set of “healthy taxes”, which includes an 8% tax on adult/violent video games and in‑game purchases.
- The measures are presented as deficit-reduction tools; Mexico forecasts a 4.1% of GDP fiscal deficit and public debt at 52.3% of GDP for 2026.
- Operators already pay corporate income tax (30% ISR), IEPS, state/municipal sales taxes (commonly 6%), and in some regions extra consumption levies — making Mexico one of the region’s heaviest tax burdens for gaming.
- Online revenue is expected to overtake land-based income by late 2025, increasing the proposal’s significance for digital operators and affiliates.
- Gaming regulation in Mexico is still founded on a 1947 law; a modernisation draft exists but progress is slow and could be sidelined by fiscal priorities or external trade shifts.
Context and relevance
The proposal is a major policy shift with material consequences for margins, investment and market structure in Mexico’s iGaming sector. A jump to 50% IEPS would sharply reduce operator take-home from GGR, potentially driving consolidation, price changes for players, or withdrawal of some foreign suppliers. It also heightens uncertainty while the industry transitions to digital-first revenue.
Regulatory modernisation remains incomplete, so the sector faces both elevated taxation and an outdated legal framework. The timing — tied to Mexico’s wider fiscal targets and a tight legislative calendar — means industry stakeholders have a short window to lobby, prepare financial models and reassess market strategies.
Why should I read this?
Short version: if you work in iGaming, fintech, legal or investment around Mexico/LatAm, this is potentially game-changing. A jump to 50% IEPS could slash operator margins and shift where firms choose to run or invest. Read this to know what’s coming and whether you need to change tactics fast.
Author take
Punchy: this isn’t a minor tweak — it’s a fiscal shock. Operators and suppliers should treat the proposal as high‑impact and act now: run scenarios, check contracts, and coordinate responses. For regulators, it’s a clear choice between revenue now and a competitive market later.
Source
Source: https://next.io/news/regulation/mexico-proposes-gambling-tax-increase/