Mexico Advances Proposal to Increase Gambling Tax from 30% to 50%
Mexico Moves Closer to Raising Gambling Taxes Significantly
Mexico’s Senate Committee on Legislative Studies has given the green light to the 2026 Miscellaneous Fiscal Package. This fiscal plan includes a substantial increase in taxes applied to betting and gaming operations, signaling progress toward implementing President Claudia Sheinbaum’s economic strategy for 2026. The proposed change entails raising the tax rate on betting and online casino activities from the current 30% to 50%.
Purpose Behind the Tax Increase
Lawmakers note that this adjustment aims not only to enhance public revenue but also to curb behaviors considered detrimental to society. Part of the new tax proceeds is intended to fund public health initiatives, support hospitals, and develop educational programs that focus on prevention.
New Tax on Violent Video Games
The legislation also introduces an 8% Special Tax on Production and Services (IEPS) targeting video games with violent content—an area previously untaxed. The IEPS is designed to apply to goods and services harmful to societal well-being, similar to existing taxes on tobacco, alcohol, and gambling.
Legislative Process and Industry Reaction
Discussions about increasing gambling taxes have been ongoing for some time. Last month, the proposal to raise these taxes to 50% was brought forward, a move met with resistance from the gambling industry but consistent with trends seen in other countries worldwide. The Chamber of Deputies has already approved the proposal, which now awaits debate and a final vote in the Senate. If passed as is, the law will be published in the Official Gazette of the Federation and come into effect on January 1, 2026.
Government’s Justification for the Tax Hike
Officials argue the government has a constitutional duty to protect public health and to use tax revenues to reduce social inequalities. The chair of the Senate’s First Committee on Legislative Studies described these measures as a matter of public responsibility rather than a reaction against industry concerns.
Ensuring Proper Regulation and Revenue Collection
Committee members emphasized that these tax increases are aligned with global fiscal policies aimed at promoting health and are neither arbitrary nor politically motivated. They also highlighted the importance of fully regulating online betting and gaming sectors in Mexico to prevent foreign operators from profiting domestically without contributing to the nation’s tax revenue.
Addressing the Budget Deficit and Social Impact
The proposed tax increases are also intended to generate additional funds to help reduce Mexico’s budget deficit, which is forecasted at 4.1% of GDP. Furthermore, these measures aim to align gambling taxes with those imposed on other socially harmful products like tobacco and sugary drinks, both to raise public funds and mitigate negative social consequences.
