In Mexico, sin taxes are reportedly likely applied on gambling as a new measure of the National Budget for 2026.

National media awaits for President Claudia Sheinbaum and Finance Secretary Rogelio Ramírez de la O to present the draft budget of the MORENA government. 

This will be the Sheinbaum administration’s first budget since she succeeded Andrés Manuel López Obrador (AMLO) as President of Mexico in 2024. 

Speculation mounts that Sheinbaum has authorised individual tax increases on soft drinks, tobacco and gambling, combined with a further new tax on violent/adult video games.

Sin sectors to pay 

According to media briefings, the proposed 2026 Economic Package includes aggressive hikes across “sin verticals”:

• Soft drinks: A new excise rate of MX$3.08 per litre, including on sugar-free products.
• Tobacco: Tax hikes ranging from 160% to 200%, effectively doubling the cost of smoking.
• Gambling: A sharp increase in the IEPS (Special Tax on Products and Services), from the current 30% to potentially 50% on gross gaming revenues.
• Violent or adult video games: will face the introduction of a new 8% tax, as part of what the administration frames as a moral health policy.

While branded as a public health initiative, business groups argue the changes represent a de facto tax raid on consumer sectors, with gambling licences particularly in the firing line.

50% is Mucho Peso

The proposed 20% increase in gambling taxes would place Mexico among the most heavily taxed gaming jurisdictions in Latin and South America. 

The move could deal a significant blow to both domestic and international investors eyeing Mexico’s $10bn gambling market, potentially stalling investment by foreign and domestic business in a growth market. 

Last week as reported by IGamingExpert, AIEJA, Mexico’s trade body for gambling licences and suppliers launched a national media campaign aimed at repositioning gambling as a strategic economic contributor, highlighting its links to sectors such as technology, IT services, and tourism.

In its campaign, AIEJA challenged the Morena government’s commitment to modernising Mexico’s banking, fintech, anti-money laundering (AML), and digital infrastructure, questioning why gambling is excluded from these national development plans. 

The trade body argues that a regulated and supported gambling industry could play a vital role in Mexico’s broader economic transformation.

Sheinbaum needs budget assurance against US hostility 

The Sheinbaum administration estimates it will raise MX$41bn (€2.5bn) from these new and expanded sin taxes. Combined with broader efforts to tighten tax collection and customs enforcement, the budget aims to close a widening fiscal gap while financing flagship social programmes.

Mexico’s 2026 expenditure is projected at MX$10.1trn (circa €550bn), against expected revenues of MX$8.7trn — leaving a budget shortfall of MX$1.4trn (€70bn).

Despite the deficit, the Treasury maintains a strong fiscal outlook, with debt-to-GDP forecasted to remain at 52.3%, well below regional peers such as Brazil or Argentina. The government is also seeking MX$1.7trn in new domestic debt and $15.5bn in foreign debt issuance, as it juggles infrastructure plans with rising social spending.

Despite a solid fiscal base, the budget faces significant political and geopolitical challenges.

Relations with the US have cooled, particularly around energy policy and trade enforcement under the USMCA. This has led to a slowdown in near-shoring investment, particularly in automotive and tech manufacturing — both of which had been expected to drive medium-term growth.

Domestically, the Morena majority in Congress is expected to support the budget, but elements of the package, especially the tax on digital content and gambling — could become flashpoints for opposition and business groups.

There is also renewed pressure on the Sheinbaum administration to repeal and modernise the outdated Federal Gaming and Lottery Law of 1947, a statute seen as incompatible with Mexico’s rapidly evolving digital and retail betting environment.

So far, the government has resisted comprehensive reform, opting instead for fiscal regulation through taxation.

As Mexico’s new government prepares to deliver its first economic blueprint, the message is unambiguous: industries tied to vice, leisure, and digital consumption will be footing a larger share of the national bill.