As one of the hosts of this summer’s World Cup, Mexico’s run to the last 16 captured the imagination of millions in the country. Its online betting market enjoyed an even greater surge.
Betting volumes were more than four times those recorded during Qatar 2022, according to data from payments and transaction infrastructure provider STP. Mordor Intelligence estimates Mexico’s online gambling market will be worth approximately $970m in 2026, and will grow at a CAGR of 8.6% through 2031.
Yet while online betting and gaming booms, authorities have still failed to agree on a regulatory framework capable of keeping pace with it. The industry continues to operate under legislation dating back to 1947, alongside regulations introduced in 2004 and most recently amended in 2023.
“What is missing is political will,” Andrea Avedillo, legal director at law firm Lazcano Sámano, tells NEXT.io.
The current framework was not designed for a modern online gambling industry, with its new technology, products and payment methods, or the far more extensive player protection measures now expected of regulated operators.
Put simply, Mexico’s gambling market has evolved at a speed its regulatory framework has been unable to match.
Avedillo says that this is in part due to gambling remaining a politically difficult subject in the country. While numerous reform proposals have been submitted over recent years, very little actual legislative progress has been made.
“Gambling continues to carry a significant political cost and, for that reason, few people are willing to bring the discussion into the public arena,” she says.
Player protection returns to the centre of the debate
Much of the debate centres around player safety and protection.
“In an environment in which we are permanently exposed to content through different media and devices, issues such as advertising regulation, the protection of minors and the promotion of responsible gambling have become particularly important,” Avedillo says.
Earlier this month, Mexico City lawmaker Alberto Martínez Urincho, of the governing Morena party, introduced a series of proposed reforms.
These included using biometric identity checks to help prevent minors from gambling, removing betting advertising from sports broadcasts and restricting the use of celebrities, athletes and influencers to promote gambling services.
Welcome bonuses and other promotional tools designed to encourage registration, deposits or more frequent gambling would also be banned. Prediction markets would be brought into the gambling framework and contracts involving political events, armed conflicts and natural disasters would be prohibited.
However, Martínez Urincho’s proposals face major hurdles. He sits in the Congress of Mexico City, while the Federal Gaming and Raffles Law is, as its name suggests, a piece of federal legislation. This means the proposal must first pass through the local legislative process before it can be sent to Mexico’s federal Congress.
“In practical terms, this scenario reduces its chances of approval,” Avedillo says.
Finding the middle ground
Around 60% of online gambling in Mexico is unlicensed, according to Miguel Ángel Ochoa, president of trade association AIEJA.
Ochoa has called on authorities to create conditions that allow licensed operators to compete more effectively against offshore and unlicensed websites.
“The expansion of online betting is undeniable, even though growth of the sector is not among the regulator’s main goals,” Ochoa tells NEXT.io.
“A clear and specific regulatory framework for the sector, accompanied by appropriate tax reform, would bring in additional revenue.”
Avedillo says much of the regulatory activity of recent years has focused on imposing further obligations and restrictions on licensed market players, rather than strengthening enforcement against the unregulated sector.
“Illegal gambling is a global challenge that feeds both on the absence of regulation and on excessive regulation,” Ochoa says.
Mexico, he argues, needs to find a middle ground.
“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,” he adds.
Tax pressure mounts
Mexico’s 2026 Economic Package included a series of increases to the country’s Special Tax on Production and Services (IEPS).
The changes covered products including sugary drinks, tobacco, video games and fuel, as well as online gambling. For iGaming, the IEPS rate increased from 30% to 50%.
Since 1 January 2026, both domestic and foreign platforms have also been required to register with Mexico’s Federal Taxpayer Registry, withhold the relevant IEPS and make monthly payments to the Tax Administration Service.
The increase has put further pressure on operator margins.
However, Ochoa believes the central problem for the industry is not the obligation to pay tax. It is the uncertainty created by the continued absence of a robust and modern legal framework.
“When we talk about uncertainty, we mean the difficulty companies face when trying to plan and make projections,” he says.
“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.”
So far, those efforts have failed to produce a breakthrough.
What does good regulation look like?
Mexico risks missing an opportunity to establish itself as one of Latin America’s most important gambling markets, and the failure to modernise its regulatory system presents a growing economic risk.
Effective regulation must keep up with innovation. Player protection must also remain a high priority. But good regulation needs to account for unintended consequences.
“Regulation is a continuous process,” Avedillo says. “The objective should not be to regulate more, but to regulate better.”
This must include an educational element. Avedillo notes that many consumers are unaware of how to identify authorised operators, despite a requirement to display the permit on their websites.
“There is little point requiring certain information to be visible on a platform if the user does not know what to look for or what it means,” Avedillo says.
“We need to educate players so they know how to distinguish a legal platform from an illegal one. It is essential that they understand why that distinction matters and know how to verify the legal status of websites.”
As ever, the question comes back to politics. One proposal that remains stalled was introduced by federal deputy Ricardo Mejía Berdeja. In October 2025, the Labour Party representative proposed repealing the 1947 law and replacing it with a modernised regulatory framework.
His bill includes the creation of a dedicated regulator operating under the Ministry of the Interior that would assume responsibility for regulating the sector. It would also introduce responsible gambling measures.
Another proposal, submitted in February by federal deputy Jericó Abramo Masso, has also failed to progress. His bill seeks to ban advertising by casinos and betting platforms on free-to-air and paid television during the daytime and early evening.
Avedillo warns that lawmakers need to prevent reform proposals from simply disappearing once they reach committee stage. While there appears to be a broad consensus that more needs to be done to protect consumers, there is far less agreement over how that should be achieved.
“Dialogue between the public and private sectors is limited at the moment,” she says. “The current administration has not shown the same level of openness to engagement with the industry that we saw under previous administrations, which makes it more difficult to build solutions together.”
For now, the political environment appears to offer little reason for optimism.
“Unless there is a change of direction in the coming months, the most reasonable expectation is that the market will continue to operate essentially as it does today, and with important questions remaining unresolved,” Avedillo concludes.