Mexico’s gambling industry trade body has warned that a newly implemented 50% gross gaming revenue (GGR) tax increase could accelerate the growth of the illegal betting market and undermine regulated operators.
The tax hike, introduced under Mexico’s 2026 fiscal reform package and effective from 1 January, has significantly increased the financial burden on licensed operators, prompting strong criticism from industry stakeholders.
Industry Calls Tax Hike a “Blow” to Legal Operators
Miguel Ángel Ochoa Sánchez, president of the Mexican Association for Permit Holders, Operators and Suppliers of the Entertainment and Gambling Industry (AIEJA), described the reform as a “blow” to the sector.
He warned that rising tax rates across Latin America risk weakening regulated markets and unintentionally benefiting unlicensed operators. According to Ochoa, higher taxation reduces competitiveness and may push players toward offshore platforms that do not contribute to national revenue or provide consumer protections.
Concerns Over Channelisation and Tax Revenue
Ochoa argued that excessive tax pressure can have the opposite effect on government revenue, as increased rates may reduce channelisation into legal markets. He noted that players migrating to illegal platforms result in lost tax income and reduced regulatory oversight.
Market Growth Outlook Remains Positive
Despite these concerns, the industry remains optimistic about Mexico’s long-term growth prospects. The country is expected to benefit from increased betting activity surrounding the 2026 FIFA World Cup, which it will co-host with the United States and Canada.
Industry forecasts suggest the tournament could significantly boost both betting volumes and player retention, supporting continued expansion in the regulated sector.
According to H2 Gambling Capital, Mexico is currently the 18th largest global gambling market, generating approximately $5.68 billion in gross win in 2024.
World Cup Expected to Drive Short-Term Surge
Operators such as Playtech also expect a major uplift in activity linked to the World Cup. The company highlighted its partnership with Caliente, noting that the tournament represents a “once-in-a-generation” opportunity that will significantly increase engagement and betting volumes across the region.
