(AsiaGameHub) –   Mexico’s 50% GGR tax increase risks fueling growth in the black market, the nation’s top trade association has warned.

Starting January 1 of this year, gambling operators in Mexico will face a heavier tax burden after the government approved a 50% GGR tax rate as part of the 2026 fiscal reform package.

Miguel Ángel Ochoa Sánchez, president of the Mexican Association for Permit Holders, Operators and Suppliers of the Entertainment and Gambling Industry (AIEJA), told iGB in a recent interview that the tax hike came as a “blow” to the industry.

He also warned that this tax increase aligns with a broader trend across the Latin American region, where higher rates ultimately hinder efforts to direct gamblers toward licensed, legal services.

“I think the primary risk posed by the growing wave of industry tax hikes being adopted by many Latin American governments is that they will end up harming legitimate, licensed operators while benefiting the illicit market,” Ochoa told iGB.

“Beyond harming businesses in the gambling sector, governments will actually collect less tax revenue by raising rates, which will drive a large number of players to unregulated platforms. These sites not only do not contribute to national public funds but also provide absolutely no consumer protection whatsoever,”

Mexico market still an attractive one

Even with his warnings about the tax increase, Ochoa still holds an optimistic view of Mexico’s gambling market.

Mexico is a co-host of the upcoming FIFA World Cup, and Ochoa believes this event will present a major opportunity for the country’s gambling industry.

“The market continues to expand quickly, and the outlook remains extremely positive,” Ochoa added.

“With the 2026 World Cup underway, industry projections point to a significant rise not just in the number of bettors but also in medium-term player retention rates.”

“Therefore, I believe we should keep the impact of this tax hike on the online sector’s growth in proper perspective,”

Per the latest data from H2 Gambling Capital, Mexico ranks as the 18th largest market for the firm, with a gross gaming win of $5.68 billion in 2024.

Playtech also expressed confidence in Mexico’s market in its recent FY25 earnings report, noting that it anticipates growth in its Americas region driven by the World Cup.

Playtech has a partnership with Mexico-focused operator Caliente, and during the company’s post-FY25 earnings call, CFO and director Chris McGinnis stated: “In Mexico, Caliente continues to perform strongly, and we expect to see a further uplift from the 2026 FIFA World Cup, as Mexico is a co-host nation and all matches will be played in local time zones.

“This is a once-in-a-lifetime event that will greatly boost visibility, user engagement and overall betting volumes.”