Latin America’s online gambling landscape is being reshaped by tax frameworks originally designed to capture revenue from companies like Netflix, Uber and Spotify.
In Mexico, a reform to the Special Tax on Production and Services law, known as the IEPS Law, came into effect on 1 January 2026, pulling internet-based betting into the tax orbit of the Ministry of Finance.
The practical result is that a foreign operator can now serve Mexican players by registering with the tax authority, paying the gaming tax and filing monthly reports, without needing a permit from the Secretariat of the Interior, known as SEGOB.
Gaming lawyer and Lazcano Sámano chair Alfredo Lazcano explained the significance clearly: “It is not a traditional licence; it is another way to operate legally in the market, and almost nobody has explored it yet.”
Lazcano went further, stating that “a Malta Gaming Authority-licensed entity can now provide online gambling into Mexico legally, without a physical presence, as long as it complies with the tax requirements.”
Mexico has been attempting to overhaul its gambling regime and create dedicated online rules for several years, but meaningful legislative progress has repeatedly stalled.
Dr Miguel Ángel Ochoa Sánchez, president of industry association AIEJA, noted that since a SEGOB working session in March 2025, “there has been no concrete progress, and we don’t even have sight of a draft” of a new Federal Gaming and Lotteries Law.
Ochoa Sánchez described what the sector is looking for, saying that gaming in Mexico “is a highly active, innovative, job-creating sector” that needs “a solid legal foundation that allows us to plan for the long term.”
The digital platform framework itself is not a gambling invention, descending from Mexico’s 2019 VAT law amendment targeting foreign digital services including streaming, ride-hailing and e-commerce platforms.
More than 300 digital companies have registered under that regime, and Lazcano describes four years of tax collection as a genuine success for the state, with serious companies, monthly reporting and compliance officers all in place.
Despite the apparent clarity of the new route, major international operators have not rushed to use it, and Lazcano points to entrenched financial incentives as the key reason for this hesitation.
Under the existing model, international brands pay permit holders around 8% of net gaming revenue, with Lazcano noting total costs can reach a significantly higher percentage depending on local arrangements made with licensed companies.
Lazcano was direct about why the route remains unexplored: “Nobody is talking about the digital platform route, because economically it does not suit the permit holders or the brokers.”
He added: “It is completely legal, but no large company wants to take the first step. They already understand the opportunity. They are waiting for someone else to go first.”
On concerns that SEGOB might challenge the tax-based route, Lazcano was unequivocal, stating: “In Mexico that is not going to happen. We have a presidential regime, and the Ministry of Finance sits above the other ministries because it collects the revenue.”
Chile presents a different version of the same tension, having applied a 19% digital VAT to gambling-related services supplied by foreign platforms since July 2026, despite having no online gambling law in place.
Cecilia Valdés, president of Chile’s casino association ACCJ, argued that the state had effectively legitimised illegal operators in pursuit of tax revenue rather than establishing a proper regulatory framework first.
She stated: “Chile has an important opportunity to build a modern, competitive, and responsible online gambling market,” but insisted that clear rules and oversight must come before the market is opened to formal investment.
Twenty-five platforms operated by 19 companies registered under the Chilean digital VAT regime, including Betano, Coolbet, Betway and Novibet, while the tax authority subsequently moved to make banks and card processors withhold the 19% tax from non-registrants including bet365, PokerStars and GGPoker.
Those registered and identified operators still represent only a fraction of the roughly 1,000 domains understood to be accessible from Chile, leaving the market in the unusual position where operators can be taxed but cannot yet be licensed.
