Casino and online sports betting operators in Mexico are facing a significant tax hike on wagering with the proposal of a new economic package for 2026.
Mexican Finance Minister Édgar Amador submitted a 2026 Economic Package that includes tax increases on products and services that can be considered detrimental to public health. Mexico applies sin taxes to certain verticals through applying the Special Tax on Production and Services (IEPS). Amador’s package proposes amending the IEPS to raise the tax on gross gaming revenue for operators from 30% to 50%.
The tax hike applies to both online and brick-and-mortar wagering and is part of a public health initiative that gives Mexico one of the highest tax rates for gaming for regulated markets in Latin and South America. In addition to gaming, the economic package raises taxes for soft drinks, tobacco and violent or adult video games. According to estimates from Mexican President Claudia Sheinbaum’s administration, the tax increase on sin verticals is projected to generate $2 billion in additional tax revenue for Mexico in 2026.
Mexico’s federal budget for 2026 is estimated to reach approximately $551 billion. The tax increases are expected to help a budget shortfall with revenue estimated to be $475 billion.
Mexico expects to approve a budget plan by Nov. 15 following legislative reviews. It must be passed by the Chamber of Deputies and the Senate for final approval.
Tax requirements for operators in Mexico
A potential tax increase in Mexico would add to a growing list of financial obligations for licensed operators in the country. Operators are already required to pay a 30% federal corporate income tax on annual net income. Certain states and municipalities across Mexico also impose sales taxes that range between 4% and 6% on gambling winnings.
Mexico is also home to local consumption taxes on gambling that can reach up to 10%.
Amador’s budget plan calls for a tax increase on tobacco sales ranging between 160% to 200%, doubling the cost of smoking in Mexico. The budget plan also proposes increasing the cost of soft drinks by 17 cents per liter, while the video games would face an 8% hike.
Calls for change in Mexico
The Mexican government is exploring tax increases as key stakeholders in the country call for a repeal and update of the Federal Gaming and Lottery Law of 1947. The measure is deemed to be outdated for Mexico’s online gaming industry by the Association of Permit Holders, Operators and Suppliers of the Entertainment and Gambling Industry.
Earlier this month, the association voiced its desire for updates to the national media.
