Mexico’s Ministry of Finance is preparing a sharp increase to the Special Tax on Production and Services (IEPS) applied to gross gaming revenue (GGR), lifting the rate from 30% to 50%, according to a senior government source. The change—framed as part of a broader effort to stabilize public finances—has been linked by the source to U.S. “Trump Tariffs.”

A highly placed official said the proposed rise is “a direct consequence of President Trump’s tariffs,” adding that volatile duties have increased pressure on Mexico’s budget and accelerated the search for additional, reliable revenue streams.

Key Takeaways

1. Mexico gambling tax: IEPS on GGR proposed to increase from 30% to 50%
2. Rationale: Source ties move to U.S. tariffs and the need to stabilize finances
3. Projected yield: MXN 41 billion annually (≈ US$2.21bn / £1.63bn)
4. Market context: Mexico iGaming & gambling market valued at US$11.37bn in 2024; CAGR 15.71% forecast to US$40.64bn by 2033
5. Next step: Mexican Senate vote before October 31

What’s Changing: IEPS on GGR to 50%

Mexico already applies a standard national tax burden on businesses and, in the gambling sector, an additional IEPS on gross gaming revenue. Under the new proposal, IEPS would jump from 30% to 50%, materially increasing the effective tax rate on licensed sports betting, casino, and iGaming operators.

While Mexico is a party to NAFTA (alongside the U.S. and Canada), the Ministry of Finance source cited frequent tariff shifts—imposed, lifted, or adjusted by the United States—as a destabilizing factor for fiscal planning:

“From one day to the next we do not know where we are. We need to stabilize our finances. And setting new taxes is one way of doing this,” the source said.

Revenue Impact and Market Size

Analysts estimate the higher IEPS could generate around MXN 41 billion per year (≈ US$2.21bn / £1.63bn). That figure comes against a Mexican gambling market valued at US$11.37bn last year, with forecasts pointing to US$40.64bn by 2033 on a projected 15.71% CAGR.

For operators, the tax step-up would directly reduce net win retention and could influence pricing, promotions, and player incentives across both retail and online channels.

Part of a Global “Sin Tax” Trend

The proposed Mexico gambling tax increase mirrors a wider global pattern of governments leaning on so-called “sin taxes”—often justified on public health and social policy grounds—to narrow budget gaps. Several U.S. states, for example, set effective sports betting and iGaming rates near the 50% threshold.

In the UK, the new administration has also signaled that gambling levies may rise as part of the autumn budget measures to tackle a substantial fiscal deficit.

Industry Ramifications in LatAm

Mexico is Latin America’s largest gambling market, and a material IEPS hike would ripple through the region:

1. Operators: Potential recalibration of marketing spend, bonuses, and product mix to protect margins
2. Affiliates & suppliers: Re-pricing of CPA/RevShare deals and renegotiation of content/platform contracts
3. Channelization: Higher tax burdens can unintentionally pressure licensed operators, potentially giving unregulated sites a price advantage if enforcement does not keep pace

Timeline: Senate Vote Before October 31

The Mexican Senate is expected to vote on the measure before October 31. If approved, implementation details—effective dates, transition rules, and compliance guidance—will be critical for licensed casino, sportsbook, and iGaming stakeholders.

Bottom Line

Mexico’s proposed IEPS increase to 50% on GGR would mark a significant shift in the country’s gambling tax framework, with fiscal motivations reportedly tied to the impact of U.S. tariffs. Given Mexico’s scale in LatAm iGaming, the decision will be closely watched by operators, affiliates, and investors across the region.