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Mexico’s private sector demonstrated its strong opposition to the government’s intended action of increasing ad valorem duty on internet gaming from 30% to 50%. The business community’s leaders threaten that the action is likely to lead to extensive job losses, reduced investment, and expansion of the illegal gaming sector across the nation.
The matter was the focus of an informal meeting between businesspeople and members of the Chamber of Deputies’ Finance Committee, where affected companies and unions called on lawmakers to reconsider the fiscal reform, warning it would damage both the formal economy and the state’s coffers.
Private Sector Voices Alarm Over the Proposal
During the meeting, Alfonso Pérez Lizaur, president of Asociación de Permisionarios y Proveedores de Juegos y Sorteos AC, indicated that such an increase in taxes would have catastrophic economic repercussions.
“Increasing the tax on gambling will drive players and operators into the black market, costing a major financial loss and an unfair advantage over regulated casinos, lotteries, and gaming operators“, Pérez Lizaur warned. “Ironically, this might even lower the tax intake of the government instead of increasing it.”
According to the entrepreneur, the games and lottery sector is a crucial business in Mexico’s formal economy, and it helps the state government’s public policies with employment and tax returns. The facts prove it: figures from the National Institute of Statistics and Geography (INEGI) corroborate that regulated gaming activities accumulated MXN 42.2 billion in official revenue, the majority of which originates from digital sources licensed and regulated by the Secretariat of the Interior (SEGOB) and the Tax Administration Service (SAT).
Anxieties Regarding the Expansion of the Parallel Market
Stakeholders believe that the proposed tax reform could unwittingly promote the very situation it aims to correct, the proliferation of unregulated gambling sites. With rising compliance and taxation charges, legitimate operators may not be able to compete with offshore or unlicensed rivals that can offer superior chances and rewards to consumers.
Trade associations are worried that such a shift would not only sully the integrity of Mexico’s legalized gaming market but also expose players to further risks of fraud and exposure. “Once users migrate over to illicit sites, getting them back into the formal sector is extremely difficult“, Pérez Lizaur stated.
Economic Implications and Timing
The hearing is part of the review of the 2026 economic package, presented by Finance Secretary Édgar Amador in September. The review is set to begin next week in the Finance Committee, where legislators will consider the overall fiscal impact of the proposal.
Operators and industry specialists have called for a more balanced policy, one that ensures fiscal responsibility without discouraging formal investment or growth in the online entertainment sector.
They point out that Mexico’s licensed gaming sector has made significant strides in recent years, achieving international standards of compliance and contributing to technological innovation and social funding projects. A drastic spike in taxes, they argue, would threaten to undo this and introduce long-term volatility.
A Demand for Dialogue and Regulation Balance
Representatives of the gaming industry are calling on authorities to hold open dialogue with stakeholders prior to establishing the reform. They stress that good regulation should achieve a balance between taxation, market competitiveness, and consumer protection.
“The legal casino sector of lotteries and other games produces significant amounts of the formal economy and contributes to paying for public policy“, Pérez Lizaur said. “We should have a system that appeals to investment, appeals to fair competition, and does not push people towards illegal alternatives.”
As the legislative battle draws near, everyone waits with bated breath to see if the Mexican government will go after the planned tax increase or find a more calibrated solution that protects both fiscal goals and the overall well-being of the nation’s gaming sector.
Source: YogoNet
