Mexico's 1947 Gambling Law: Major Reforms and Tax Hikes Proposed

Mexico is facing a defining moment in its gambling history. For nearly eight decades, the nation has relied on the Federal Law on Games and Raffles of 1947. This relic from an era before the internet and digital sports betting no longer meets modern demands. Now, Deputy Alberto Martínez Urincho of the governing MORENA party has launched a bid to structurally transform the system. His goal is to treat gambling not just as a revenue stream, but primarily as a public health issue.

The reform proposal outlines deep-seated changes affecting both land-based and online sectors. Notably, Mexico's approximately 400 land-based gambling establishments would face significantly stricter identity verification requirements. Previously, these requirements were inconsistent, hindering the protection of vulnerable groups. With the 2026 FIFA World Cup approaching, political pressure is mounting to establish a secure framework for the expected surge in betting activity.

Numbers and Facts

The urgency of the reform is backed by alarming data. Estimates suggest that between 4% and 8% of Mexican adolescents exhibit problematic or dependent gambling behaviors. The National Autonomous University of Mexico (UNAM) supports these concerns with further calculations, indicating that up to 3.9 million Mexicans could be affected by gambling addiction, based on a prevalence rate of 1% to 3% of the total population. These figures highlight why Martínez Urincho demands that operators authorized by the Ministry of the Interior (SEGOB) must display mandatory health warnings across online platforms and at physical casino entrances.

Financially, the government has already taken action, albeit in a way that faces massive resistance from operators. The 2026 budget increased the IEPS gambling tax rate from 30% to 50%. The MORENA party's stated goal is to generate approximately MXN 41 billion (about USD 2.1 billion) in revenue. However, industry representatives warn that this tax burden destroys the competitiveness of the regulated market and drives players toward offshore providers.

Background

The history of Mexican regulation is characterized by stagnation. Despite eight years in power, the MORENA administration has yet to conduct a comprehensive review of the 1947 law. A November 2023 decree already caused unrest by prohibiting slot machines for new permit holders. Existing slot permits were capped at a maximum, non-extendable term of 15 years.

"Gambling-related harm must be recognized as a public-health issue, establishing stronger foundations for consumer protections." - Alberto Martínez Urincho, MORENA Party Deputy

Martínez Urincho is also targeting the advertising world. Influencer marketing and social media ads are to be drastically restricted to protect younger audiences. Congress must now decide whether to follow the path of fiscal exploitation through high taxes or the path of active player protection proposed by Martínez Urincho.

Why it matters for German players

For German players used to the strictly regulated casinos on the GGL whitelist, the situation in Mexico sounds almost adventurous. In Germany, the Interstate Treaty on Gambling 2021 (GlüStV 2021) precisely regulates what is permitted. While Mexico is just beginning to debate ID checks and warnings, systems like LUGAS and OASIS are already standard in Germany. German customers must adhere to a cross-operator deposit limit of 1,000 euros per month and a 1-euro stake limit per spin on slots. Players in Germany benefit from a level of protection overseen by the GGL that is currently only a distant goal in Mexico. German travelers in Mexico should be cautious, as local online platforms often do not meet European safety standards.

What it means for GGL-licensed casinos

German providers with a GGL license can view the developments in Latin America as a cautionary tale regarding tax policy. The increase of the Mexican tax to 50% shows how governments attempt to plug budget holes through the industry. In Germany, the 5.3% tax on stakes for online slots and poker is already a controversial topic, as it affects the channelization rate. GGL casinos must continue to differentiate themselves through quality and safety to compete against the black market, which is likely to flourish even more in countries like Mexico due to extreme tax burdens.