With iGaming, the World Cup, and a 50% Tax Shake-Up
Having a population of nearly 131 million people, internet penetration above 83% and smartphones in the hands of practically every connected adult, Mexico, the second biggest economy in Latin America, is already one of the most watched online gambling markets in the world, and the 2026 World Cup it co-hosts has only sharpened that attention, reports Rethink Gambling.
Market Overview: Size and Growth
Since Mexico first tried to bring online gambling under a regulatory umbrella in 2014, the sector has gone from a curiosity to a real economy. In those first years the climb was steep: the market went from a turnover of US$24 million to US$441 million in 2018 (up by 1,533%), reaching US$798 million by early 2020. Sizing it precisely today is harder than most reports admit, estimates swing widely depending on whether you count total wagers (handle) or gross gaming revenue (GGR), and whether offshore play is included. Whichever yardstick you trust, the direction is the same: up, and fastest online.
By product type, the current gambling market in Mexico is segmented into sports betting, casino, lottery and others. Land-based revenue still leans heavily on casinos and slots. But online tells a different story: sports betting now accounts for roughly half of online GGR, by some 2025 estimates as much as 56%, with online casino close behind and growing fast. In a World Cup year, that sports-betting share is only climbing.
By channel type, the gambling market is segmented into online and land based. When we first profiled this market in the first half of 2022, land-based still led, having only just come through a heavy pandemic dip, while online was climbing fast. That order has since flipped: by 2024–25 online had crossed the tipping point, accounting for an estimated 55% of all gambling activity in the country, a reversal that would have looked improbable a decade ago.
It has been reported that the growth of online gambling in recent years was ensured by prolonged COVID-19 lockdown in Mexico, which pushed a generation of gamers to use online gaming applications which became normal as everyday entertainment. Added to this is the growing use of smartphones with convenient applications and the increasing expansion of the internet offering easy access to online gambling platforms.
Also, along comes digitalization growth enabling secure digital payment options, including cryptocurrencies which are on offer by some gaming platforms; and of course, overall technological development with innovations that result in better graphics and interface quality.
The grey market remains the elephant in the room. The industry body AIEJA estimates that around 60% of the online betting available to Mexican players still runs through sites that operate illegally or without paying local taxes – a structural problem the government’s 2025–26 reforms are explicitly trying to fix. Mexico is also now the second-largest mobile gambling audience in Latin America, after Brazil.
Mexican Gambling Legal Framework
Gambling is legal and regulated in Mexico, but it still runs on a 1947 federal law that never imagined the internet. The sector contributed an estimated US$700 million in federal tax in 2023 and sustains around 148,000 direct jobs; INEGI’s 2025 Economic Census valued gaming and entertainment revenues at about MXN 42 billion (US$2.5 billiob). Here is how the law got to where it is:
Who Regulates Gambling Today
Oversight sits with the Ministry of the Interior (Secretaría de Gobernación, SEGOB) through its Gaming and Lotteries Bureau (Dirección General de Juegos y Sorteos). The country has roughly 380 licensed casinos, and no new standalone operator permits are being granted. New entrants must partner with an existing land-based permit holder, which is exactly how recent arrivals have come in. A requirement dating back to the 2004 rules also obliges gaming servers to sit physically in Mexico, though offshore sites have long served Mexican players regardless.
The headline change of 2025 was the tax. As part of the 2026 Economic Package (Official Gazette, 7 November 2025; in force from 1 January 2026), Mexico doubled the IEPS levy on gambling from the 30% rate that was still in place at the time of our 1H2022 report to 50% of GGR, covering both land-based and online play and, for the first time, reaching foreign online operators based on where the customer sits.
The government frames it as a ‘health tax’ and earmarks part of the proceeds for gambling-addiction programmes. The industry warns, loudly, that it could push players toward the very black market the reform is meant to shrink. Tax specialists cited by Milenio even estimate the state could lose revenue on net, as much as MXN 12 billion (US$700 million), if licensed operators retreat.
What’s Still Missing
Mexico still lacks a single modern statute that cleanly defines online gambling. In October 2025 a lawmaker filed the Ley Federal de Juegos con Apuesta y Sorteos to replace the 1947 law, create a national gambling institute and write proper rules for digital casinos and mobile betting, but its review deadline was pushed to August 2027. Separate proposals would restrict gambling ads on free-to-air TV to a late-night window and impose prison terms of up to ten years for match-fixing and betting fraud.
Online Casino vs. Sports Betting
As it was shown above, Mexico is one of the countries in Latin America with the highest number of users of online gambling sites and casinos. And this number is still to grow.
Online gambling includes two important types: sports betting and online casinos, and for a while the conventional wisdom was that casino had quietly overtaken sports betting. The most recent data complicates that: 2025 estimates put sports betting back in front online, at roughly 50–56% of revenue, with casino a fast-growing second.
Rather than lean on a single snapshot of search volume, it’s more useful to look at who is entering the market and why. Football is the gravitational centre of Mexican betting, and demand spikes around big tournaments, which is why operators spent 2025 and early 2026 racing to be live before the World Cup. The clearest example: in May 2026 Stake launched a fully authorised stake.mx platform in Mexico, joining a crowded field led by the homegrown giant Caliente, whose caliente.mx site drew an estimated 49.6 million monthly visits in early 2026, making it comfortably the country’s most-visited gambling brand.
Thus, 2021 and 2022 saw Betsson and Big Bola Casinos partnering to launch Betsson Mexico. This event was followed by bet365 launching in Mexico as well after their partnering with the local TV Azteca conglomerate. RSI’s RushBet arrived through a tie-up with Grupo Multimedios, and the pipeline hasn’t slowed since. Each new entrant typically partnering with a Mexican permit holder, as the rules require.
And it is not an exhaustive list, and the industry is clearly still picking up speed. Analysts expect online casino to keep gaining ground over time thanks to the sheer variety packed into a single platform, while sports betting rides the event calendar – World Cups, Liga MX seasons, boxing nights – in waves.
Who Gambles in Mexico
More recent figures fill in the picture. Industry estimates count over 15 million active gamblers in Mexico, skewing young and urban: millennials aged 18–35 make up a large share of digital users. On the harm side, CONADIC’s 2024 survey found that about 2.3% of Mexican adults show signs of problem gambling, roughly double the global average, which is part of why the 2025 tax was sold as a public-health measure.
Online Casino Games
Due to federal law amendments of 2014-2015 Mexico saw appearance of online casinos and several operators got licensed. A lot of foreign online casino platforms still operate inside the country without a permit from SEGOB, happily accepting Mexican players. That grey zone is exactly what the 2026 rules target, by taxing offshore bets at the point of consumption and allowing non-compliant sites to be blocked. Though enforcement, as ever, will be the real test.
Mexican gamblers have strong preferences when it comes to playing at online casinos for real money. The most popular type of gambling, both land-based and online, are slot machines. Video slot games with Mexican and South American themes are popular as well.
Other online casino entertainment options that daily draw the attention of Mexicans are (listed in the descending order of interest): Bingo, Blackjack, Roulette, Poker, Baccarat, and live games, particularly blackjack and roulette.
Favourite Sports That Mexicans Bet On
Sports betting competes with online casinos in the level of excitement it arouses among players with football, obviously, being first and foremost sport to bet on.
Other active gambling markets within Mexico are basketball, motor racing, baseball
Tennis, American football, boxing, ice hockey. The most popular competitions that Mexicans bet on include Mexico’s Primera Liga, Champions League, English Premier League, German Bundesliga, and Spanish La Liga. Mexican Baseball League, Major League Baseball.
In 2026 one event towered over all of them: the FIFA World Cup, which Mexico co-hosted with the United States and Canada. It was the first 48-team, 104-match edition, when Mexico City, Guadalajara and Monterrey staged games, and was the single biggest sports-betting event in history. For Mexican sportsbooks, the most attractive markets to bet on were the winner, the winning round/set, the first scoring team, and the match result.
Lotteries
Lotteries are totally regulated by law and supervised by the Mexican government. Both online and offline versions of lottery are taking their place in Mexico and becoming popular on a large scale.
With its continuous year-on-year growth, the Mexican gambling industry has made room for various lotteries totally enjoyed by the country’s gamblers. The biggest of them, the Lotería Nacional’s Melate, has produced record jackpots in the hundreds of millions of pesos – its largest, around MXN 639 million (about US$50 million), back in 2013.
Offline Betting
In the land-based world, horse racing, greyhound racing and the fast-paced ball game Jai Alai all draw bettors, alongside blood sports with a long following. Cockfighting, contrary to a common belief, isn’t banned nationwide: it stays legal and regulated, with betting authorised under state permits, in strongholds such as Jalisco, Sinaloa, Michoacán and Zacatecas, while a growing list of states (Mexico City, Veracruz, Sonora, Coahuila, Nuevo León, Quintana Roo) has prohibited it.
Bullfighting has had a rockier ride. Mexico City, home to Plaza México, the world’s largest bullring, voted in March 2025 to ban ‘violent’ bullfighting, so bulls can no longer be injured or killed in the ring; five states had already banned it outright. Betting on the kill is exactly the kind of informal wagering now fading from the capital. Traditional betting rooms with slots, poker and blackjack remain popular, too, and, contrary to some older guides, there is no rule barring Mexican residents from them; the only hard limits are on minors (18+ for casinos, 21+ for the lottery).
Mobile iGaming in Mexico
According to INEGI’s ENDUTIH survey, Mexico had 100.2 million internet users in 2024, 83.1% of the population aged six and over, with independent trackers putting the figure near 110 million by the start of 2025. Crucially, 97.2% of internet users connect via a smartphone, far ahead of smart TVs (43.6%) or computers (35.9%), and the average user spends about 4.4 hours a day online (5.7 hours among 18–24-year-olds).
That makes gambling an almost entirely mobile activity, dominated by Android devices. Forecasters expect the mobile-internet base to climb past 112 million users by the late 2020s, and Mexico already ranks as Latin America’s second-largest mobile market after Brazil, adding tens of millions of potential players.
Challenges and prospects of the Mexican gambling market
There are high expectations that the iGaming market in Mexico will continue to grow rapidly, helped by a young population focused on cell phones and operators rapidly launching products into the market before its saturation. However, there are several points to be taken into account to decide how well it will all work, where the tax pressure is seen, mainly, with the new IEPS of 50% which gives Mexico one of the heaviest tax burdens in Latin America, with the inherent risks of pushing players back into the illegal market.
This is followed by urgent regulatory clarity on the 1947 gambling law which continues to regulate online gambling, with a replacement bill that will not be debated before 2027. Both encumbrances feed the grey market which remains at around 60% in online gambling and is the main battle for licensed operators to funnel players to legal sites.
With the advancement in smartphones, mobile products maintain supremacy, and this is where operators compete in user experience, live content and innovation, relying on alliances with the main iGaming companies.
Likewise, responsible gaming and security are essential with data protection, KYC and addiction concerns, which lie behind the high ‘health tax’ framework and growing regulatory calls to limit advertising.
The 2026 World Cup test was the first true stress point of the Mexican regulated market with an increase in demand, even with an entirely new high tax regime.
Challenges and Prospects of the Mexican Gambling Market
Mexico’s iGaming market is widely expected to keep growing fast, helped by a young, mobile-first population and operators rushing in before it saturates. A handful of issues will decide how well it runs:
- Tax pressure. The new 50% IEPS gives Mexico one of Latin America’s heaviest gaming tax burdens and risks pushing players back to the black market.
- Regulatory clarity. The 1947 law still governs online gambling, and its replacement bill will not pass before 2027.
- The grey market. Around 60% of online betting is still unlicensed, so channelling players onto legal sites is the central battle.
- Mobile-first product. Operators compete on user experience, live content and innovation, leaning on partnerships with top iGaming firms.
- Responsible gambling and security. Data protection, KYC and addiction concerns sit behind the ‘health tax’ framing and growing advertising limits.
- The World Cup test. 2026 is the first real stress test of the regulated market, a surge of demand meeting a brand-new tax regime.
The authorities are no longer just talking: the 2025–26 tax overhaul, the replacement bill, the advertising and match-fixing proposals and the slot-machine crackdown all point the same way, a state trying to drag online gambling fully into the light. Whether a 50% tax helps that happen or quietly feeds the black market is the question the next two years will answer, after the World Cup provided the first real stress test and a big winner for the industry.
Source: https://rethinkgambling.org/
