On October 29, the Mexican Senate approved, both in general and in detail, the reform to the Special Tax on Production and Services (IEPS) Law, which increases the tax rate applied to the gaming industry from 30% to 50%, as part of the 2026 Economic Package.

Following this decision, the Association of Licensees, Operators and Suppliers of the Entertainment and Gaming Industry (AIEJA) expressed its deep regret, describing the measure as harmful to the proper functioning of Mexico’s gaming industry.

AIEJA recalled that for more than a decade it has requested an update to the 1947 law that governs the sector, along with a comprehensive fiscal reform, to strengthen regulation, generate formal employment, and increase tax collection without harming established businesses.

“Higher taxation leads to lower revenue,” the association warned, emphasizing that the IEPS increase will not only make operations more expensive but could also encourage the growth of the illegal gaming market, as players might migrate to unregulated platforms to avoid higher costs.

The organization also urged authorities to implement effective measures against illegal online gaming, which currently poses unfair competition to legally established operators.

Finally, AIEJA cautioned that this tax increase jeopardizes the survival of smaller gaming companies and discourages both domestic and foreign investment, at a time when the industry’s legal framework is expected to be modernized.

“We reiterate our disappointment with this decision and invite our authorities and legislators to engage with the industry to better understand its operations before making decisions that may prove counterproductive for the country,” the association concluded.