Mexico’s gambling industry could face one of its heaviest fiscal burdens yet, as the Finance Ministry has proposed raising the Special Tax on Production and Services (IEPS) on casinos and online betting from 30% to 50% of gross gaming revenue. This proposal forms part of the country’s 2026 Economic Package, aimed at reducing the budget deficit while promoting so-called “healthy taxes” on products linked to health and social risks. Alongside gambling, the plan introduces an 8% IEPS on video games with violent or adult content and continues existing levies on tobacco and sugary beverages.
The increase would affect both brick-and-mortar establishments and digital platforms, including foreign operators without a tax residence in Mexico. Operators already navigate a complex web of fiscal obligations, including corporate income tax, state and municipal levies, and regulatory fees, making the proposed hike a significant challenge. Although some relief exists, such as deductions for local or regional taxes paid, the overall tax burden remains among the highest in Latin America.
The proposal coincides with a period of digital transition in Mexico’s gaming market, with online revenue expected to surpass land-based operations by the end of 2025. At the same time, regulatory modernisation remains slow under a framework originating from a 1947 law. Industry observers note that efforts to reform the Federal Gaming and Lottery Law may be overshadowed by fiscal pressures or broader economic policies.
With parliamentary debates scheduled for October and November, operators and trade organisations are preparing strategies for potential mitigation. If approved, the tax hike could reshape the competitive landscape, affecting profitability, investment decisions, and the future growth of Mexico’s casino and online betting markets. This development signals a pivotal moment for operators navigating an increasingly regulated and high-tax environment.
