Mexico’s Chamber of Deputies Approves Major Tax Hike on Gambling to 50% of GGR

In a sweeping reform of the Special Tax on Production and Services (IEPS), Mexico’s Chamber of Deputies has approved increasing the tax rate on games of chance and online gambling from 30 % up to 50 % of gross gaming revenue (GGR), as part of a broader budget-and-health-tax package for 2026.

The decision was adopted by a vote of 351 in favour, 129 against, and one abstention, marking one of the most contentious budget items of the year.

 Under the approved amendment, licensed casinos, online sports-betting and other gaming operators in Mexico will face a significantly higher tax burden starting in 2026. The government projects that the tax hike will bolster federal revenues and align with public-health objectives by treating gambling similarly to other “sin-tax” sectors.

However, industry analysts warn that raising the IEPS to 50 % may drive greater wagering to the unlicensed market. Some estimates claim up to 60 % of Mexico’s online gambling activity currently occurs outside formal regulation, meaning the tax increase could push more players and operators into the informal-illegal sphere.
The package also includes higher taxes on soft drinks, tobacco and video games with violent or adult content — an integrated approach to increase revenue while aiming to reduce harmful consumption.

Operators now face a choice: absorb the tax increase and maintain compliance, or risk profitability and potentially exit the market. The next step for the reform is review by the Senate, before final approval and publication in the Official Gazette.