Gaming Law 2024 Comparisons

The cornerstone of the Mexican gambling regulatory framework is the Federal Gaming and Raffles Law (the “Gaming Law”), which was published in 1947 with only 17 articles. This minimal content reflects the historical context of 1947, which was long before the advent of the internet and social media, making it insufficient to address modern-day realities.

For 57 years, the Gaming Law remained the sole legal framework governing gambling in Mexico. The lack of comprehensive regulation led to uncertainty and allowed the continuous opening of land-based establishments, often protected by constitutional court rulings. To address these regulatory gaps, on 17 September 2004, the Mexican government issued the Regulations of the Federal Gaming and Raffles Law (the “Gaming Regulations”) to supplement the original 1947 law.

The Gaming Regulations were reformed in 2012 and 2013, but despite these updates, technological advancements in the gaming industry have outpaced the existing legal framework. For example, the Gaming Regulations include only three articles addressing online, telephone or electronic betting, while the online gaming industry in Mexico has expanded significantly, with increasing numbers of operators, service providers and participants. This demonstrates the need for further reforms to adapt to the current technological landscape.

As mentioned in 1. Introduction, the Gaming Regulations in Mexico do not provide a clear reference to online gaming activities. The current regulatory framework contains only three articles that address the placing of bets electronically or via the internet.

Under the Gaming Regulations, online gambling is closely linked to land-based casinos. Specifically, Article 85, which pertains to sports books, stipulates that authorised casinos are permitted to take bets via the internet, telephone or electronic means. However, to operate in this manner, permit holders must implement a robust internal control system for transactions. This system must include procedures and rules designed to ensure the inviolability and integrity of their betting systems, as well as compliance with other regulatory requirements. These safeguards are critical to maintaining the legality and reliability of online betting tied to land-based operations.

Additionally, Article 104 mandates that participants who are attracted or registered through the internet or a telephone network must be identified through a registration system. These provisions highlight a significant legal gap, reinforcing the need for a reform of the law to introduce a dedicated chapter that clearly and expressly regulates online gambling in Mexico.

According to Mexican law, all games involving betting must obtain authorisation and are subject to control and supervision by the Ministry of the Interior (Secretaría de Gobernación or SEGOB), including the list of games with bets outlined in Article 2 of the Gaming Law. These games include chess, draughts and similar games; dominoes; dice; blackjack; bowling; billiards; football; and, in all their variations, races involving people, cars and animals, along with a broad category encompassing all types of sports.

Therefore, land-based casinos and online gaming are permitted. In Mexico, there are 36 land-based permit holders that are, or could be, allowed to operate online gaming.

A land-based casino in Mexico typically covers activities such as bingo, raffles and slot machines, but not always online gaming or live gaming (such as poker and roulette). Permit holders must request special authorisation from SEGOB to offer these additional services if the original permit granted does not refer to or allow such activities. This ensures that any expansion of gaming activities beyond the standard offerings is closely regulated and supervised.

Notwithstanding that certain games – such as live gaming, poker and roulette – are not expressly described in Mexican law, the government has authorised some permit holders to offer these games in Mexico. This indicates that, while not explicitly outlined in the Gaming Law or the Gaming Regulations, these games can still be permitted under the regulatory oversight of SEGOB, allowing for broader gaming activities within the country.

With regard to social gaming activities, the Gaming Regulations exclude certain games from requiring authorisation. Specifically, games involving betting that are played without profit, within a private home, solely for fun or as an occasional pastime are exempt from regulation. These games must not be conducted regularly and should involve only individuals who are associated with – or the owners or residents of – the location where the games take place, with participants being admitted by these individuals. This exemption creates a distinction between casual social gaming and regulated gambling activities.

In Mexico, any gambling or gaming matters are governed by the Gaming Law and the Gaming Regulations.

The Gaming Law and the Gaming Regulations are federal legislation and therefore apply all over Mexico.

According to Article 1 of the Gaming Law, gambling is generally forbidden in Mexico. The only exceptions are games and raffles in Article 2 of the Gaming Law explicitly authorised by the Gambling and Raffles Bureau (Dirección General de Juegos y Sorteos, or the “Bureau”), which is the sole authority empowered to grant gambling and raffle permits.

Article 7 of the Gaming Regulations stipulates that games involving betting and raffles may only be conducted, operated or organised with prior written permission from the Bureau.

While the Gaming Regulations have expanded upon the restrictive vision of the Gaming Law to include gaming, betting, and lotteries, they still lack comprehensive updates and details. For instance, “online gaming activities” are not fully described or regulated, leaving much of the related oversight to the Bureau’s discretion.

Additionally, although gaming activities are under federal jurisdiction, local governments and their legislation play a significant role in casino gaming, particularly through property law. Local authorisation is required to open casino establishments. In some states, such as Baja California Sur, restrictions are placed on the opening of new land-based casinos, often due to local constitutional provisions. Other states, including Coahuila, Guanajuato, Nuevo Leon and Tlaxcala, have enacted similar (non-retroactive) restrictions or prohibitions regarding the establishment of new casinos.

Under the Gaming Regulations, there is no distinction between gambling and betting. The Regulations define a “bet” as the amount, in local currency, risked in a game permitted under Article 2 of the Gambling Law and regulated by the Regulations. The total prize amount, when added to the amount risked, must exceed the initial amount risked.

Land-based gambling is defined as any open or closed place in which games involving betting or raffles are carried out with the permission of the Bureau in accordance with the Gaming Law and the Gaming Regulations.

As mentioned in 2.2 Land-Based, the Gaming Regulations do not refer specifically to online gaming; therefore, the law does not have a formal definition.

According to Article 151 of the Gaming Regulations, the following – among others – are classified as serious offences:

• failure by the permit holder to comply with any term or condition established in the permit or in law;
• the information or documentation provided to the Bureau to obtain a permit is false;
• the permit holder or any of its shareholders or beneficiaries is convicted of fraudulent crimes, whether patrimonial, fiscal or related to organised crime or operations involving illicit resources;
• the permit holder or any of its shareholders or beneficiaries is declared bankrupt;
• the operation or services provided to the public are interrupted, either totally or partially, for a second time within a 12-month period without just cause; and
• the permit holder modifies or substantially alters the nature or conditions of games including betting or authorised draws.

In accordance with Article 147 of the Gaming Regulations, any infringement of the law, or of the permits issued by the Bureau, will be sanctioned with:

• a fine;
• arrest;
• the suspension of activities; and/or
• revocation of the permit and closure of the establishment(s).

Conducting games of chance involving betting without a permit issued by the regulatory authority is considered illegal and is punishable by imprisonment.

According to Article 12 of the Gaming Law, individuals involved in unauthorised gambling and betting – including owners, organisers, managers, administrators and players – are subject to a prison term of between three months and three years and a fine ranging from MXN500 to MXN10,000. This applies to all participants in the illegal activity.

On 16 November 2023, the Decree that amends, adds and repeals several provisions of the Federal Gaming and Raffles Law (the “Decree”) was published in the Federal Official Gazette (the “Official Gazette”), significantly impacting the gaming industry in Mexico. The Decree effectively prohibits slot machines, eliminates the sub-licensor structure from the Gaming Regulations and imposes limitations on the acquired rights of permit holders for operating new land-based and online casinos.

Although the legality of said reform is at least questionable, the support of the political party currently in power was enough to pass it. In response, all sectors of the gaming industry have filed amparo lawsuits (constitutional protection) against the Decree. An amparo lawsuit allows individuals to challenge governmental actions that infringe upon their fundamental rights. These lawsuits argue that various violations, including restrictions on human rights, lack legal authority and disregard acquired rights.

Almost all amparo lawsuits have been successful, and there is a reasonable expectation that many others will have similar outcomes. However, the government retains the option to appeal these rulings, and it is likely that the Supreme Court will ultimately address and resolve these constitutional challenges.

In the authors’ opinion, the Court will definitively declare the above-mentioned reform unconstitutional, given that on 18 January 2017, the Constitutional Controversy 114/2013, filed by the Chamber of Deputies of the Congress of the Union, was definitely resolved by the Supreme Court, declaring the legality and therefore the constitutionality of the regulations affected by the reform, especially those related to the operation of machines for the drawing of numbers and symbols (slot machines).

According to Article 3 of the Gaming Law, SEGOB, through the Bureau, is the federal executive authority responsible for the regulation, authorisation, supervision and enforcement of gambling and raffle activities, including betting.

This authority oversees all gambling operations in Mexico, with the exception of the National Lottery for Public Assistance (Lotería Nacional para la Asistencia Pública or LOTENAL), which operates under its own law and is owned and managed by the government.

The Gaming Regulations effectively provide for the organisation of games of chance in Mexico, and their promulgation ended several disputes and conflicts arising from the deficiencies of the federal law. Mexico’s approach in terms of regulation is therefore based on acquired rights.

The reform mentioned in 3.7 Recent or Forthcoming Legislative Changes revokes or changes the following articles of the Gaming Regulations, among others:

• the reform removes section XXVIII BIS of Article 3 of the Regulations, which defines the drawing of numbers or symbols through machines as an activity in which the participant, through a device of any kind, subject to chance, places a bet by inserting a ticket, coin, token or any electronic payment device or similar object with the purpose of obtaining a prize;
• Section VI of Article 91 of the Regulations, which establishes that sweepstakes be conducted through machines, is eliminated;
• a paragraph is added to Article 91 of the Regulations, stating that “For the purposes of this article, betting games with cards or similar in all their modalities, dice, roulette and slot machines shall not be construed as raffles”; and
• Articles 137 Bis, 137 Ter and 137 Quater of the Regulations are removed.

The Gaming Law establishes four types of licences:

• licences for opening and operating horse and greyhound race tracks, jai alai fronton arenas, remote betting centres (sports books) and betting centres or rooms for drawing numbers (land-based casinos, under which live gaming, slot machines and online gaming activities are classified) – these are granted only to Mexican commercial companies duly constituted under Mexican laws;
• a licence for opening and operating facilities for gambling at national fairs (eg, the Feria Nacional de San Marcos);
• a licence for the opening and operation of horse race tracks in temporary scenarios and cockfighting betting; and
• a licence for draws.

The operation of sports books and land-based casinos requires the specific approval of the local municipality, stating its consent to the installation and operation of such establishment. There is no standard procedure for obtaining this authorisation, nor a standard document that local authorities use for this purpose, so the documents and wording differ from one administration to another.

As previously mentioned, any person or business entity wishing to operate a gambling establishment must obtain a land-based licence before commencing operations. Only Mexican legal entities – ie, commercial companies duly formed and registered under the Business Entities Act – are eligible to apply for sports book and land-based casino licences.

The Bureau will assess various factors, particularly for sports book and land-based casino licences. It will evaluate the integrity and probity of the applicant’s shareholders and key personnel, the applicant’s experience in operating the relevant product, and the incorporation of good corporate governance principles in the applicant’s by-laws. The application must also disclose the ultimate beneficial owner.

However, the current reality in Mexico is that the regulatory authority seldom grants new permits for land-based casinos. As a result, any organisation interested in establishing a land-based casino or offering online gambling must partner with one of the 36 authorised licensees.

The Gaming Regulations stipulate that land-based casino licences have a minimum duration of one year and a maximum of 25 years, with the possibility of being extended for additional 15-year periods. The specific duration of the licence within these limits is determined at the discretion of the gambling authority.

Licences for operating fairs, as well as temporary off-site horse races and cockfighting betting, are granted for a maximum of 28 days or the authorised event period, whichever applies.

Applications, along with the required information and documentation, must be submitted to the Bureau at its central offices in Mexico City. All documents must be original and in Spanish, with public documents from other jurisdictions requiring an apostille and official translation. In general, the following information and documentation are required:

• name, nationality and address;
• property and financial statements;
• a curriculum vitae;
• professional or patrimonial links with other licence holders, shareholders, advisers, beneficiaries or staff members;
• an affidavit stating they have no criminal record or history of bankruptcy; and
• a credit report from a credit information company.

In addition, legal entities must file:

• a copy of the incorporation deed, as well as all modifications; and
• balance sheets and statements of income.

No specific timeline is provided in the Gaming Law or Gaming Regulations. However, according to Article 17 of the Federal Law of Administrative Procedure, unless a legal or administrative provision specifies otherwise, the regulator must resolve any application within a maximum of three months. If no resolution is issued within this period, it is deemed a rejection of the petitioner’s request. This rejection can be challenged through a judicial procedure.

In practice, the regulator has the authority to request additional documents or information as deemed necessary, which often results in the authorisation process exceeding the initial three-month timeframe set by law.

The Gaming Regulations do not impose any fees for applying for a land-based licence or obtaining special authorisation for online gaming.

According to Article 5 of the Gaming Law, licence holders are required to pay annual fees, referred to as “participation”, ranging from 1–2% of net gaming revenue, in addition to any other taxes imposed by applicable tax laws.

Applications and associated information and documentation must be filed with the Bureau at its central offices in Mexico City. See 4.7 Application Requirements for more details.

See 3.7 Recent or Forthcoming Legislative Changes regarding sub-licences and slot machines.

An additional effort has been made by the current director of the Bureau to establish a registry of importers and manufacturers in order to better control who is legally introducing and distributing slot machines. However, no effective implementation has been achieved by the authority so far. It remains to be seen whether this effort will be resumed by the new administration, which is set to take office in October 2024.       

It is important to note that Mexican gambling legislation does not explicitly mention the term “online gaming”. Instead, Mexican law states that establishments may accept bets through mobile phones, the internet or other electronic devices. Similarly, the regulations specify that participants in raffles may enter via the internet or telephone.

In other words, based on the permits allowed under Mexican law, operators of land-based casinos can request authorisation to offer online gambling, and both national and foreign entities may enter into agreements with authorised permit holders to conduct these activities.

For this purpose, permit holders or sub-licensors under Article 30 of the Gaming Regulations who wish to obtain a permit for online activities must meet additional requirements. These primarily concern technological and operational aspects, as outlined in Article 85 of the Gaming Regulations. These requirements include, among other things:

• a description of the control system for transactions carried out online, such as the measures needed to avoid the participation of minors and ensure responsible gaming; and
• a description of the procedures to be used to ensure the inviolability and prevent the manipulation of betting systems.

The aforementioned control system must have at least:

• the bettor’s account number and identity; and
• the date, time, transaction number, stake amount and requested selection.

Last but not least, the mechanism for attracting bets must be approved by the Bureau.

Mexican gambling legislation does not specifically regulate the use, registration or certification of software and suppliers. However, the government plans to establish an official standard for compliance by software providers and machine manufacturers. As of now, this has not been discussed or approved.

Mexican gambling legislation does not specifically regulate affiliates involved in gambling activities.

Before the publication of the Decree, Article 30 of the Gaming Regulations stated that a permit holder could exploit its permit in conjunction with third parties through various arrangements, such as joint ventures, service provision or other agreements. This is still possible through sub-licensors who obtained such authorisation prior to such amendments to the Gaming Regulations in November 2023.

See 3.7 Recent or Forthcoming Legislative Changes regarding sub-licences.

The primary tool for preventing unlicensed gambling activities is the prohibition against promoting unlicensed gambling websites. Furthermore, unlicensed gambling websites are not allowed to engage in marketing or publicity within Mexico.

Internet service providers, broadcasters, radio stations and certain suppliers in the gambling industry, including payment processors, are prohibited from hiring or providing services to unlicensed websites. In fact, these companies typically refrain from entering into agreements with such websites.

The gambling regulatory framework is centred on protecting minors and preventing them from accessing gambling, ensuring the integrity and transparency of gambling activities, and maintaining a fair gaming system that is continuously monitored. All entities involved in the gambling industry that hold a licence granted by the Bureau, including both land-based and online sub-licensors, are required to implement internal controls or measures to help prevent gambling addiction.

No recent or forthcoming changes have been made, or are expected to be made, regarding responsible gambling (also known as safer gambling) in the Bureau’s policies and criteria.

Regarding online gambling, almost all permits granted by the Bureau specifically require that all authorised casinos implement an internal control system to prevent minors from placing bets and to safeguard against the manipulation of betting systems, among other requirements.

Additionally, the authority mandates that platforms be designed to incorporate responsible gambling features, such as allowing participants the right to self-exclude from gambling activities. Operators are also required to display warning messages on their platforms to help prevent gambling addiction, as well as information on how to access counselling and treatment services.

Furthermore, some permit holders make significant contributions to various NGOs focused on responsible gaming.

In accordance with the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin (the “Anti-money Laundering Law”), gambling activities are considered “vulnerable activities”. Permit holders and operators are therefore obliged to comply with the provisions of the following laws, among others:

• the Anti-money Laundering Law;
• the regulations of the Anti-money Laundering Law; and
• the general rules referred to in the Anti-money Laundering Law.

No recent changes have been made regarding anti-money laundering (AML) legislation, and no forthcoming changes are expected.

Licence holders have certain obligations under the Anti-money Laundering Law, the most significant of which are:

• to register as “performers” of the vulnerable activity;
• to identify their clients, players or buyers, verifying their identity based on credentials or official documentation and gathering copies of the documentation supporting such identification;
• to request information from their clients regarding whether they have knowledge of the existence of the owner or beneficiary and, in any case, to request them to exhibit the corresponding official documentation that allows them to identify them, should such information be in their possession; and
• to give notice to the applicable authority when any of the gambling activities exceeds approximately USD2,500.

The relevant regulatory/supervisory agencies are the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público), the Financial Intelligence Unit (Unidad de Inteligencia Financiera) and the Deputy General Directorate of Legal Processes (Dirección General Adjunta de Procesos Legales).

The advertising and marketing of games involving betting and raffles – authorised in accordance with the Gaming Law and the Gaming Regulations – including such activities conducted in the establishments in which the games take place, will be performed in accordance with the terms of the applicable provisions in Article 9 of the Gaming Regulations.

Relevant products may only be offered to persons of legal age. People under the influence of alcohol or drugs will not be allowed into the facilities. Bets will be made in the national currency, Mexican pesos (cryptocurrency is excluded). Permit holders cannot offer credit to the participants.

Any advertising and/or marketing of gaming activities must be performed under the following terms and conditions:

• it cannot explicitly promote games that feature betting;
• it must be expressed clearly and precisely to avoid inducing error, deception or confusion among the public;
• it must indicate the relevant licence number;
• it must include warning messages indicating that games that feature betting are prohibited for minors; and

• it must include messages inviting people to play responsibly and with the main purpose of entertainment, fun and recreation.

The sanctions or penalties that can be imposed for infringing advertising regulations include fines and, in cases where the breach is considered serious or significant, closure of the establishment. The severity of the punishment will depend on the criteria of the authority and the implications of the offence committed by the permit holder or operator.

These sanctions may be imposed by the regulatory authority or, in a few cases, the Federal Consumer Protection Agency.

No recent changes have been made, or are expected to be made, regarding the Bureau’s advertising policies and criteria.

Permit holders have an obligation under the Gaming Regulations to inform the Bureau of any change of control of permit holders and their authorised operators. Although there is no definition of “control” within the gaming legal framework, permit holders are obliged to notify the authority of any change in shareholders up to the ultimate beneficiary owner in their corporate structure, as well as of any modification to their authorised operators.

A notice obligation is triggered whenever:

• a share purchase (or partnership interest) agreement is executed; or
• any modification is made to the percentage of participation of its partners or shareholders.

Such provision is applicable to any change in the shareholding composition of the permit holder, or in the shareholders or partners thereof, whether it is carried out through capitalisations, reduction of capital, spin-offs, mergers or other corporate practices in which other companies mediate between the permit holder, shareholders, partners and the ultimate beneficiary owner. The only exception is operations carried out through the stock exchange, in which the transaction does not imply a change of control in the permit holder and/or authorised operator.

The Gaming Regulations do not provide any special rules in relation to passive investors in acquisitions or changes of control; the general rule mentioned in 10.2 Change of Corporate Control Triggers is also applicable in this scenario.

No recent or forthcoming changes have been made, or are expected to be made, regarding acquisitions and changes in control.

In cases where the regulatory authority deems the violations committed by permit holders or operators to be serious, it proceeds to revoke the granted permits and/or close down the establishments operating under those permits. For less serious violations, fines will be imposed.

This process is conducted through the appropriate administrative sanctioning procedures, ensuring the right of defence for the parties involved. In instances of serious violations of the law or illegal gambling, the regulatory authority refers the matter to criminal authorities for intervention.

The authority carries out the execution of its resolutions, such as the closure of establishments, using public force. The establishments are sealed to prevent further activities.

Fines are collected through collaboration agreements with various authorities.

Financial penalties are enforced through the collection procedures outlined in the law, allowing for the seizure of goods or bank accounts if the permit holder or operator refuses to pay the fine.

No recent changes have been made, nor are any expected, regarding the Bureau’s enforcement policies and criteria.

The following federal taxes apply to gambling:

• permit contributions – contributions payable by the permit holder to SEGOB that are set out in the permit (1% or 2%);
• the special tax on products and services (Impuesto Especial de Productos y Servicios or IEPS) – for remote betting and gaming; and
• federal player withholding tax – a tax to be withheld by the operator or the permit holder, in accordance with Mexican federal law, on the revenue of the prizes obtained by players through their use of the website.

The following local taxes may or may not apply to gambling depending on the particular local regulation:

• state operator tax – a tax to be paid by the permit holder or the operator in accordance with Mexican state law; and
• state player withholding tax – a tax to be withheld by the operator or the permit holder, in accordance with Mexican state laws, on the revenue of the prizes obtained by players through their use of the website.

No recent or forthcoming changes have been made, or are expected to be made, regarding tax.

Under Mexican legislation, there are no personal authorisations or licences for gaming and gambling. Nonetheless, it is possible for individuals to obtain raffle authorisations, normally for fairs or for commercial or charity purposes (also known as lotteries).

A lottery is defined as an activity in which holders or bearers of a ticket, through the prior selection of a number, gain the right to participate – either free of charge or for a fee – in a procedure previously stipulated and approved by the Ministry of the Interior. In this process, a number, combination of numbers, symbol or symbols are randomly selected to determine one or more prize winners.

Similarly, a ticket is understood as the authorised document or electronic record that grants the bearer the right to participate in a lottery and guarantees their rights, as applicable. These rights must be printed on the document itself or otherwise recorded in the system where the records are maintained.

The Gaming Regulations establish a limited number of lottery modalities that individuals are permitted to conduct. Any mechanism that does not fall within these approved modalities is not allowed.

Anyone conducting raffles in any form must request a permit from the Bureau at least 15 business days in advance, complying with all relevant requirements. The Bureau follows a systemised procedure for reviewing, processing and resolving applications, utilising pre-established checklists to verify the required documentation. From the time of filing, the Bureau has ten business days to issue a decision. If additional information or documentation is required, the authority is granted an additional ten business days to resolve the matter.

There are no specific requirements for directors, owners, senior management or shareholders, including disclosure thresholds. If the prize value exceeds a certain threshold, a fee must be paid for the participation of a government official at the time of the raffles.

Fees are calculated based on the value of the product or service to be raffled.

Requirements for personal authorisations and licences include specification of the following:

• the period during which participants can enter raffles;
• the geographical area in which participants are eligible to take part in raffles;
• the total number of tickets to be issued;
• the number of folios to be generated, and the method used for their numbering;
• the number of prizes to be awarded, including their value (inclusive of VAT); and
• a description of the goods and/or services being promoted, among other details.

Any infringement of the law, or of the permits issued by the Bureau, will be sanctioned with a fine and/or arrest.

No recent or forthcoming changes have been made, or are expected to be made, regarding raffles.