Mexico online gambling market grows as lawmakers debate regulatory reforms

Mexico’s online gambling market is expanding at a time when policymakers are considering how the country’s regulatory framework should respond to changing consumer behaviour, digital payments and the growing reach of online betting. Market projections indicate continued expansion while lawmakers and industry representatives debate taxation, licensing, consumer protection and the treatment of digitally delivered gambling services.

The latest market estimate from Mordor Intelligence places the Mexico online gambling market at approximately $970 million in 2026. The research firm projects the market to reach about $1.09 billion by 2031, representing a compound annual growth rate of 8.6% during the forecast period.

The figures underline the commercial significance of the sector, but they also highlight a policy challenge. Mexico is managing a modern digital gambling environment under a statutory framework that originated in 1947. The Federal Law on Games and Sweepstakes was published on December 31, 1947 while its principal implementing regulation dates from 2004 and was amended in 2023.

A fast-growing market meets an older legal framework

The growth of digital betting has changed how gambling products are accessed in Mexico. Consumers can use mobile devices, electronic payments and internet-based platforms without interacting with traditional physical betting venues. Sports betting remains a particularly important part of the market with Mordor Intelligence estimating that it represented 56.41% of market revenue in 2025. Mobile and tablet activity accounted for 63.92% of user activity during the same period.

The commercial momentum was particularly visible during the 2026 FIFA World Cup. An analysis attributed to STP found that transaction volume across digital gaming and betting activity on its infrastructure increased by 431.75% during the tournament compared with the 2022 FIFA World Cup in Qatar. That represents a substantial increase in activity during a major international sporting event and illustrates the importance of sports competitions to Mexico’s digital betting economy.

This growth is occurring alongside a broader debate over how gambling legislation should address online services. The issue is not simply whether the sector should grow. It also concerns how licensed businesses can operate within a predictable framework while authorities seek stronger mechanisms for consumer protection and enforcement.

Player protection becomes a central issue

Consumer protection has moved closer to the centre of the discussion as online betting becomes more accessible through smartphones and other connected devices. Policymakers are examining measures intended to strengthen age controls, identity verification and public warnings related to gambling risks.

Deputy Alberto Martínez Urincho of MORENA presented an initiative before the Congress of Mexico City in August 2026 seeking changes to the Federal Law on Games and Sweepstakes. The proposal addresses gambling addiction, regulatory oversight and the operation of digital gambling platforms. Because the legislation concerned is federal, the initiative must proceed through the Mexico City legislative process before any measure could be referred to the federal Congress. It is therefore important to distinguish the proposal from changes already enacted in law.

Among the measures described in connection with the proposal are stronger identity controls designed to prevent access by minors as well as mandatory health and risk warnings for gambling providers. The proposal also addresses promotional and advertising practices and seeks tighter controls around certain types of prediction markets.

From a regulatory perspective, these proposals reflect a wider effort to make the rules more closely aligned with the realities of online gambling. At the same time, any reforms would need to establish clear obligations without creating unnecessary uncertainty for businesses seeking to comply with Mexican law.

The unlicensed market remains a major concern

Another important part of the debate involves the scale of online activity that may not comply with Mexico’s existing requirements. The 2026 federal economic package documentation cites an AIEJA estimate that 60% of betting websites operating online, including domestic and foreign sites, do not meet the requirements established under Mexican legislation and do not pay the relevant taxes.

That figure has become part of the broader policy argument over how the country can reduce the size of the non-compliant market. AIEJA President Miguel Ángel Ochoa Sánchez has repeatedly argued for a framework that allows regulated businesses to compete more effectively while giving authorities stronger tools to address illegal operations. His position places regulatory certainty and effective enforcement at the centre of the discussion.

Miguel Ángel Ochoa, president of AIEJA, commented:

“The expansion of online betting is undeniable, even though growth of the sector is not among the regulator’s main goals. A clear and specific regulatory framework for the sector, accompanied by appropriate tax reform, would bring in additional revenue.”

The question is complicated by the international nature of digital gambling. Websites can target customers across borders while using digital advertising, payment services and remote technology. This can make enforcement more difficult when domestic operators face a different set of compliance requirements from businesses operating outside the country.

Tax policy adds another layer of pressure

Taxation has become one of the most significant developments affecting the sector in 2026. Mexico changed the IEPS treatment of games with betting and sweepstakes, increasing the applicable rate from 30% to 50%. The federal legislative record also specifically provides for the 50% rate to apply to games with betting and sweepstakes conducted through the internet or other electronic means.

The tax adjustment adds to the compliance responsibilities facing businesses operating in the market. Registration and tax administration requirements also have implications for companies providing digital gambling services to Mexican consumers.

For licensed operators, the issue is therefore broader than the headline tax rate. Compliance systems, reporting obligations, payment controls and customer verification processes all contribute to the overall cost of operating within a regulated environment.

At the same time, regulators must consider whether high compliance costs could unintentionally strengthen the competitive position of websites that do not meet the same obligations. This is one of the main policy tensions identified by industry representatives.

Ochoa calls for greater regulatory certainty

Ochoa has also stressed that uncertainty itself creates practical difficulties for businesses attempting to plan their investments and operating strategies.

Miguel Ángel Ochoa, president of AIEJA, commented:

“Illegal gambling is a global challenge that feeds both on the absence of regulation and on excessive regulation. We need a balance that allows us to reduce illegal gambling, but that would require international cooperation. A little political will would help move things forward.”

His comments reflect a longstanding industry argument that effective regulation requires a balance between enforcement and market viability. Excessively complex rules can increase the difficulty of compliance while insufficient regulation may leave consumers exposed and make enforcement against non-compliant providers more difficult.

The same concern applies to taxation. A tax system must generate public revenue while maintaining conditions in which licensed businesses can compete on broadly comparable terms. The question is particularly relevant when offshore or otherwise non-compliant websites can potentially operate without carrying the same fiscal burden.

Ochoa has previously described this uncertainty as a planning challenge rather than simply a dispute over taxation.

Miguel Ángel Ochoa, president of AIEJA, commented:

“When we talk about uncertainty, we mean the difficulty companies face when trying to plan and make projections. For years, AIEJA has tried to convince the authorities to consider tax reform for our sector, concentrated at federal level and subsequently redistributed to states and municipalities, on the basis of fairness and proportionality.”

What the next phase could mean for operators

The direction of Mexico’s online gambling policy is likely to remain a key issue for operators, suppliers and policymakers. The size of the market suggests substantial commercial potential while the regulatory discussion indicates that future growth may be accompanied by stricter consumer protection standards and more demanding compliance requirements.

The market data also point toward continued mobile-led expansion. Mordor Intelligence forecasts strong growth in mobile and tablet activity and identifies sports betting as the leading segment. This makes identity verification, age controls and responsible gambling mechanisms increasingly important for operators whose services are accessed primarily through personal devices.

For businesses, regulatory clarity may ultimately be as important as market growth. A clearly defined framework can provide greater visibility over licensing requirements, taxation, advertising standards and consumer safeguards. For authorities, the challenge will be to create rules that are enforceable in a digital environment while maintaining effective protections for consumers.

Conclusion

Mexico’s online gambling market is entering an important stage in its development. Strong consumer demand, widespread digital access and the popularity of sports betting are supporting continued expansion while policymakers are reassessing whether the country’s regulatory structure is equipped for an increasingly digital sector.

The debate now extends beyond market growth. It encompasses taxation, licensing, age verification, advertising, responsible gambling and the challenge of distinguishing compliant operations from those that fall outside the established framework. The 50% IEPS rate introduced for gambling and the regulatory proposal advanced by Alberto Martínez Urincho demonstrate that the policy environment is already evolving.

The central issue for Mexico will be finding a workable balance. Regulation that is clear and enforceable can strengthen consumer confidence while supporting a more transparent market. At the same time, effective enforcement and proportionate taxation will be important if licensed operators are expected to compete against services that may not face comparable obligations.

With the market projected to continue growing through 2031, the decisions taken during this period could influence not only the commercial future of online gambling in Mexico but also the standards applied to consumer protection and regulatory oversight for years to come.

FAQs

What is the current size of Mexico’s online gambling market?
Mordor Intelligence estimates that Mexico’s online gambling market will be worth approximately $970 million in 2026. The firm forecasts growth to about $1.09 billion by 2031.

What is driving online gambling growth in Mexico?
Mobile access, digital payment infrastructure, consumer interest in sports betting and major sporting events are among the factors supporting market growth.

Is Mexico’s gambling law new?
No. The Federal Law on Games and Sweepstakes dates from 1947. Its implementing regulation was published in 2004 and was amended in 2023.

Has Mexico increased the tax rate on online gambling?
Yes. The IEPS rate applicable to games with betting and sweepstakes was increased from 30% to 50% with specific provisions covering internet and electronic gambling services.

What did Alberto Martínez Urincho propose?
His 2026 initiative seeks tighter regulation of digital gambling and includes measures concerning gambling addiction, identity verification, protection of minors, warnings and advertising controls.

Has Martínez Urincho’s proposal become law?
No. It remains a legislative proposal. Because it concerns federal legislation, it must follow the applicable legislative process before any federal legal change could take effect.

What is AIEJA?
AIEJA is the Mexican Association of Permit Holders, Operators and Suppliers of the Entertainment and Gaming Industry. It represents interests within Mexico’s regulated gaming sector.

What has AIEJA said about the unlicensed market?
AIEJA has highlighted concerns about online betting websites that may not comply with Mexican legal and tax requirements. Federal legislative documentation cites an AIEJA estimate that 60% of betting websites operating online did not meet the relevant requirements.

Why is sports betting important in Mexico?
Sports betting is a leading segment of the market and is strongly connected with Mexico’s interest in football and other major sporting events. Tournament periods can produce substantial increases in betting activity.

What is the main regulatory challenge for Mexico?
A key challenge is establishing clear and enforceable rules that protect consumers, support tax compliance and allow properly regulated businesses to operate with greater certainty while addressing non-compliant activity.