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Mexico is heading into the year 2026 with a gambling and betting sector that has outgrown its own regulation. The sector is now worth more than $10 billion annually, but is still governed by laws passed back in 1947.
With the passing of the Fiscal Package for the year 2026, the ongoing reforms to its gambling laws, and the increased regulation of the sector, the country is at the cusp of a critical moment that could determine its future as the largest gambling market in Latin America or the continued expansion of its already significant illegal market.
A Market Growing Faster Than Regulation
At the SBC Summit 2025 in Lisbon, Portugal, the gambling sector was informed that the gambling and betting sector in Mexico was at the cusp of a major change. This change has now arrived.
Mexico is at the moment considering the passing of a new Federal Gaming Law as well as the implementation of tax laws that could tax the sector as much as 50%.
“Mexico does not have real regulation, but concessions from the mid-20th century. The debate has centered excessively on how to raise revenue instead of how to establish a system that can support the sector’s development“, said Codere CEO Aviv Sher.
Experts are also cautioning the country against over-taxation of the sector, which could cause citizens to turn to the already significant illegal market that accounts for nearly 60% of the country’s online activities.
A New Law After Nearly 70 Years
In October 2025, Congressman Ricardo Mejía Berdeja proposed the passing of a new law that would replace the one passed nearly seven decades ago.
“The bill proposes the creation of the National Institute of Games and Sweepstakes, which would be in charge of the regulation, inspection, and enforcement of the regulations.”
The initiative also includes responsible gaming features, a 21-year-old minimum age requirement, self-exclusion tools, and betting limits according to the financial capabilities of players.
“From a legal perspective, a new gaming law that repeals the 1947 law would constitute an unprecedented change in structure. It is not simply a question of updating outdated rules but rather redefining the regulatory structure itself”, said Andrea Avedillo Builla, Legal Director at Lazcano Sámano.
She added: “The creation of an autonomous or decentralized authority may bring more certainty and professionalism, but this will also depend on its structure.”
Fiscal Pressure Reshapes the Industry
The 2026 Fiscal Package imposes a much higher tax burden on the industry, with a 50% increase in the IEPS tax rate to 50%, as well as a requirement that all platforms register with tax authorities and withhold all applicable taxes.
At the same time, Mexico’s tax authority (SAT) has been granted more power to access real-time data on platforms.
A new amendment to the Amparo Law requires companies to ensure that all applicable taxes are paid in full before they can legally dispute them.
“It is essential to note that the amparo trial is, in essence, a trial meant to protect citizens’ rights against actions by the state. These new regulations, however, oblige the gaming industry to reassess their strategies as well as their relationships with tax authorities”, Avedillo Builla said.
Payments, Crypto, and Modernization Challenges
The gaming industry has also seen another area of tension arise with the advent of new forms of payment. While some gaming operators are using cryptocurrencies as a means to meet growing demand, others remain hesitant due to regulatory uncertainty.
The bigger picture, however, is how this innovation fits into a system of increased regulation, especially as the authorities continue to prioritize financial traceability and anti-money laundering practices.
A Defining Moment for the Market
Mexico has reached a crossroads in its development as a gaming industry. If it can successfully walk the fine line between regulatory reform, fiscal policy, and tackling the problem of illegal gaming, it has the potential to become the largest regulated gaming industry in Latin America, dwarfing Colombia, Peru, and Chile combined.
However, if it is unable to keep taxation and regulatory demands in line with the capabilities of the gaming industry, then the illegal gaming sector will continue to thrive.
This is not just about the money for the government; it is also about the legitimacy of the industry, player protection, and the viability of the industry in the long run.
Source: SBC Noticias
