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Mexico’s leading gambling trade body has warned that the country’s 50% GGR tax, introduced on 1 January 2026, risks accelerating player migration to unlicensed platforms and ultimately reducing government tax receipts.
Miguel Ángel Ochoa Sánchez, president of the Mexican Association for Permit Holders, Operators and Suppliers of the Entertainment and Gambling Industry (AIEJA), described the levy as a “blow” to the sector. Approved as part of a 2026 fiscal reform package, the rate more than doubles the previous 30% burden on operators and positions Mexico among the highest-taxed regulated gambling markets in Latin America.
Channelisation at risk
Ochoa’s core concern is channelisation. When legal operators face tax rates that significantly erode margins, players migrate to unlicensed alternatives that carry no fiscal contribution and no consumer protection obligations. He frames Mexico’s situation as part of a broader regional pattern.
“I believe the main danger of these trends toward increased taxes on the industry, which many Latin American governments are adopting, is that they ultimately harm legally established industries to the benefit of the illegal market,” Ochoa told iGB. “And in the end, besides hurting businesses in the sector, governments collect less tax revenue by raising taxes, encouraging a significant migration of players to platforms that not only fail to contribute to our national treasuries but also offer no security whatsoever for customers.”
The dynamic Ochoa describes is not unique to Mexico. Brazil’s regulated market faced similar warnings following proposals to raise its betting tax to 18% by 2028, with the country’s own trade body flagging comparable black market risks. Read more: Brazil betting tax crisis: ANJL warns of market collapse.
Market fundamentals remain strong
Despite the regulatory headwind, Ochoa stopped short of a negative overall assessment. Mexico’s gambling market is growing at pace and he expects a substantial uplift from the country co-hosting the 2026 FIFA World Cup.
“The market continues to grow rapidly and the outlook remains very positive,” Ochoa said. “With the arrival of the 2026 World Cup, projections indicate a substantial increase not only in the volume of bettors but also in player retention in the medium term. Therefore, I would put into perspective the impact of this tax increase on the momentum of the online sector.”
Mexico is H2 Gambling Capital’s 18th-largest gambling market globally, with a gross win of $5.68bn in 2024. The scale of the market, combined with World Cup-driven engagement, suggests the commercial opportunity remains significant even after the tax increase.
Operators maintaining confidence
Playtech, which holds a commercial agreement with Mexico-facing operator Caliente, took a similarly bullish position in its FY25 earnings commentary. CFO and director Chris McGinnis described the World Cup as a transformative moment for the market on the company’s post-results call.
“In Mexico, Caliente continues to perform strongly, and we expect to see a further uplift from the 2026 Fifa World Cup, where Mexico is a co-host nation and the games will be on a local time zone. This is a once-in-a-generation event that will significantly boost visibility, engagement and betting volumes.”
Playtech’s broader Americas confidence is reflected in its financial guidance, with the company raising its 2025 EBITDA outlook to €195m on the back of regional performance. Read more: Playtech raises 2025 EBITDA guidance to €195m on Americas.
The tension between the 50% tax rate and Ochoa’s optimism about World Cup-driven volume illustrates the core debate in Mexico’s market. Short-term regulatory pressure is real, but the event-driven demand cycle may absorb some of the margin impact for operators with scale. Whether the tax rate accelerates black market growth in the meantime remains the outstanding question for regulators and operators alike. Brazil’s experience, where the first year of regulation generated $7bn GGR and 25 million active bettors, offers a reference point for what well-calibrated LatAm regulation can achieve when tax levels support rather than undermine channelisation.
Source: iGaming Business
