Mexico Introduces New Gambling Tax Legislation

There may be trouble ahead for the Mexican gambling industry, with President Manuel López Obrador wanting to reduce the number of gambling licenses that are issued. This comes after he ordered that some existing licenses were withdrawn due to concerns over whether operators were able to adhere to gambling regulations.

However, there is concern in some Mexican states that this will lead to a loss in revenue. In order to attempt to mitigate any effects of Obrador’s crackdown on gambling, the Treasury Commission of the Congress of the state of Jalisco has just passed a new law that it hopes will ensure gaming operators comply with all existing tax laws.

The Jalisco State Revenue Law for 2021 includes a 10% tax on slot and casino game winnings. Technically, the tax was already in place, but it was felt that operators were able to find ways to avoid paying the tax. As a result, lawmakers pushed for the separate legislation.

The new laws, the Tax on Gambling Expenditures, are designed to ensure that the state receives more money from its gambling market. Jalisco Governor Enrique Alfaro put the measures together and he is hoping for an increased budget of $6.2 billion for the state, $20 million of which he expects to come from the tax.

Lawmakers were broadly supportive of the new measures, and it is expected that tax revenues generated by gambling will be used to help fund the Red Cross, the state’s Cancer Institute, and a number of hospitals. A quarter of the revenue will also be used to fund problem gambling initiatives.

Gerardo Quirino Velázquez The Jalisco Treasury Commission Deputy

Gerardo Quirino Velázquez, the Jalisco Treasury Commission Deputy, helped the measure to pass. He first highlighted the way in which gambling operators were avoiding paying taxes. Speaking recently, he said, “Different businesses like casinos were already operating but disguised as other things. Then we decided to establish a new list to be able to cover all those businesses that had the same characteristics as casinos.”

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