Mexico must reform regulatory regime to keep pace with wider LatAm region, report says
Mexico’s outdated gambling regulations threaten to cap its growth potential compared to Latin America’s biggest regulated markets, according to an industry report.
A 128-page report titled Mexico At A Crossroads, by software supplier Betby, has contended Mexico will keep pace with Brazil, Colombia and Peru only if it follows their lead in adopting clearer rules around licensing, technical standards, responsible gambling, payments and enforcement.
Mexico’s core gambling laws date back to 1947 and are built around physical venues, permits, paper-based controls and local supervision.
Atucha Advisory Founder Ramiro Atucha told Betby that Mexico’s historical regulatory practice of linking online licenses to land-based operations was holding the market back, despite it having significant scale and room for growth.
“An operator with 50 physical locations can legally operate 50 websites, and ends up sub-licensing those spaces to third parties,” he said. “In practice, that is the only route into the market: securing one of the available domains within the license of a land-based operator. For an international operator, navigating that environment is complex.”
Later he added, “Size and digital growth are pushing the market upward, while the regulatory structure is moving behind it.”
Scale and growth potential
Mexico is one of the largest markets in Latin America, with a population of 132 million and 110 million internet users, according to DataReportal’s Digital 2026: Mexico report.
Citing DataReportal, Betby said mobile internet usage is at 96.7% in the country, with smartphone penetration at 88.5%.
The addition of H2 Gambling Capital figures revealed online gambling makes up 60.2% of Mexico’s €6.06 billion (US$6.9 billion)1 EUR = 1.1436 USD
2026-07-07Powered by CMG CurrenShift GGR, with onshore operators capturing around 79.9% of that market. Moreover, mobile gambling GGR is reported as generating €1.65 billion (US$1.9 billion)1 EUR = 1.1436 USD
2026-07-07Powered by CMG CurrenShift.
As such, Mexico is already a major gambling market with potential for further growth. The report highlighted that the country’s channelization rate is the highest among the region’s four benchmark markets, ahead of Colombia, Peru and Brazil.
It also has the strongest growth outlook, according to Betby, with GGR forecast to rise by 48.3% between 2026 and 2030, also ahead of the other three major LatAm markets.
A regulatory outlier
However, Colombia, Peru and Brazil have all modernized and clarified their online gambling rules, while Mexico is relying on older core laws, with secondary rules and interpretation filling the gaps.
Betby spoke to Evert Montero Cárdenas, the President of Colombia’s main trade gambling association, Fecoljuegos.
Reflecting on the mistakes that Colombia made on its way to updating regulation and taxation rules, he said, “Legal certainty is not built on its own. It is built through process. And the right process for Mexico is not for the regulator to design the framework alone and then communicate it to the sector. It is for the framework to be built jointly, from the beginning, with all actors who understand the activity: the associations representing operators, the operators themselves, technology providers and responsible gambling experts.”
Forecasting the future of the market, Betby concluded that Mexico will track the wider global market in becoming more digital, more mobile and more channelized. However, as the market inevitably grows, the country’s regulatory framework will be under increasing pressure to evolve with it and keep pace with development.
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The Backstory
Mexico’s digital market has outgrown its rule book
Mexico’s gambling industry has become one of Latin America’s most important digital markets while still operating under a legal architecture designed for another era. The country’s core gambling law dates to 1947, when regulation centered on physical venues, local permits and paper-based controls. Online betting has since become central to the business, but the legal framework has not been rebuilt around digital licensing, technical standards, modern payments or national enforcement.
That mismatch is the backdrop to the latest warning that Mexico risks falling behind regional peers despite having the scale to remain a top-tier market. Mexico has a population of 132 million, broad internet access and high mobile penetration. Those conditions have helped online gambling account for a majority of gross gaming revenue, while onshore operators still capture most regulated activity. The market is not small, informal or speculative. It is already large, channelized and growing.
The policy problem is that Mexico’s route to legal online operations has historically been tied to land-based permit holders. That structure has allowed some operators with physical permits to extend digital activity through multiple domains or commercial arrangements with third parties. It has also made the market harder to enter, harder to supervise and less transparent than newer regimes in the region. For international companies, the issue is not whether Mexico has demand. It is whether the rules provide enough certainty to justify long-term investment.
Latin America has moved from frontier to regulated competition
Mexico’s regulatory debate is part of a wider shift across Latin America. The region was once treated by many online gambling companies as a growth frontier where speed, traffic acquisition and brand visibility mattered more than compliance infrastructure. That assumption is increasingly outdated. Colombia has operated a regulated online gambling market for years. Peru has moved to formalize its framework. Brazil’s long-awaited federal rules have taken effect, bringing a market of continental scale under clearer advertising, licensing and integrity requirements.
That maturation has changed the competitive standard. Operators, suppliers and affiliates are now being judged on licensing discipline, local knowledge, responsible gambling controls and sustainable customer acquisition. As Latin America’s affiliate market matures, industry executives have warned that generic strategies imported from Europe or North America are no longer enough. Some Argentine provinces require affiliates to be disclosed and approved by licensed operators. Brazil’s framework includes rules around advertising and influencer conduct. The broader message is that market access is no longer the same as market opportunity.
That matters for Mexico because the country is competing for the same capital, technology and executive attention as its neighbors. If Colombia, Peru and Brazil offer clearer licensing pathways and more predictable compliance expectations, they can become easier places to deploy products and marketing budgets. Mexico’s advantage is its scale. Its vulnerability is that scale alone may not compensate for legal uncertainty as the region professionalizes.
Payments show why old structures face new pressure
The pressure to modernize is especially visible in payments. Digital gambling markets depend on fast deposits, reliable withdrawals, anti-money laundering checks, know-your-customer controls and data sharing among operators, payment providers and regulators. In Mexico, cash still plays an important role in consumer behavior, creating demand for products that bridge physical money and digital accounts.
That dynamic was illustrated when Neosurf entered Latin America through a Mexico launch, offering a cash-to-digital wallet service for online gaming operators. The company said Mexican operators had gaps in customer support, compliance processes and payment efficiency. Its pitch was not simply convenience. It framed payments as part of a broader compliance and player protection system, including secure data sharing and support for AML and KYC procedures.
Such developments underscore why regulation built around physical permits can strain under digital-market realities. Payment systems generate data, risk flags and customer records that can strengthen oversight if rules define how they should be used. Without clear technical and reporting standards, however, regulators may struggle to see across a market that is increasingly mobile, multi-brand and dependent on third-party technology providers.
The same is true for responsible gambling. Digital platforms can monitor play patterns, affordability signals and self-exclusion tools more effectively than paper-based systems, but only when rules require consistent implementation and enforcement. Mexico’s market growth will increase the value of those protections. It also will increase the cost of not having them.
Suppliers and testing labs are preparing for a more complex market
Regulatory modernization is not only a government question. It affects suppliers, testing laboratories, platform providers and compliance advisers that support operators. As gambling technology becomes more sophisticated, certification and oversight need to keep pace with artificial intelligence, cybersecurity risks, blockchain products, crypto payments, sweepstakes models and prediction markets.
Gaming Laboratories International’s recent expansion shows how quickly the compliance ecosystem is scaling. The company said it had added more than 150 employees this year and planned additional hiring to support technological, mathematical and cybersecurity work. Its executives have said regulators and operators are seeking guidance on emerging products that may be contentious today but could become mainstream if they are brought into regulated channels. The company’s push to expand staffing and formalize innovation work reflects a broader industry reality: regulation now has to anticipate products that did not exist when many gambling statutes were written.
For Mexico, that raises the stakes of reform. A modern framework would not merely clarify who can operate. It would set expectations for testing, game integrity, cybersecurity, auditability and data reporting. It also would help international suppliers determine which products can be certified and deployed in the country. Without that clarity, Mexico risks becoming a market where demand is strong but product development lags more predictable jurisdictions.
Illegal and gray-market risks sharpen the policy choice
Mexico’s high channelization rate is an important asset, but it is not guaranteed. Regulated markets can lose ground when taxes, licensing barriers or uncertainty push operators and players toward offshore or gray-market alternatives. The threat is not unique to Mexico. In the U.S., tribal and commercial gaming leaders have warned that illegal operators, sweepstakes models and prediction markets could erode state-regulated systems.
At the Indian Gaming Association Tradeshow and Convention, industry speakers described offshore operators, crypto products, prediction markets and sweepstakes as a growing challenge to the gambling ecosystem. The concern, outlined in a discussion on how tribes and commercial operators are confronting illegal gaming, was that some products may try to bypass state gambling laws and established licensing controls. Although the U.S. legal structure differs from Mexico’s, the underlying policy lesson is relevant: when regulatory boundaries are unclear, alternative models test them.
That is why Mexico’s reform debate is not just about unlocking growth. It is also about preserving control over a market that is already digital and expanding. Clearer rules can make it easier to enforce against unlicensed operators, protect consumers, collect tax revenue and give compliant companies confidence that they are not competing against firms avoiding the costs of regulation.
The investment case depends on certainty
Large operators are increasingly focused on regulated markets where they can build durable player relationships, control acquisition costs and cross-sell across products. BetMGM’s recent investor messaging in the U.S. showed how mature operators are shifting attention from raw customer growth to higher-value players, marketing efficiency and long-term profitability. In that context, BetMGM’s emphasis on regulated growth and player value reflects a broader industry trend that also applies to Latin America.
Mexico has many of the ingredients operators want: population scale, mobile adoption, strong onshore participation and room for digital expansion. But as Brazil, Colombia and Peru continue to refine their systems, Mexico’s older framework becomes more conspicuous. Investors and suppliers can tolerate complexity when growth is exceptional, but they tend to reward markets where licensing, payments, technical standards and enforcement are predictable.
The causality is direct. Clear rules encourage investment in local teams, safer payments, certified products and responsible gambling systems. Those investments improve channelization and consumer protection, which strengthen the legal market and public revenue. Ambiguity does the opposite. It slows entry, complicates oversight and gives gray-market competitors room to grow.
Mexico’s challenge, then, is not whether the market can expand. It likely will. The question is whether that expansion occurs under a framework capable of matching the pace of digital gambling in the rest of Latin America.
