Mexico occupies a special place on the global iGaming map. It is one of the largest markets in Latin America, with a population of more than 125 million people, steady growth in digital payments, and high user engagement in online entertainment. At the same time, the country combines significant commercial potential with a complex and, in many respects, contradictory legal environment, which makes launching an online casino here both attractive and legally sensitive.
The key feature of the Mexican market is that online casinos are effectively permitted but not regulated directly by a separate law. The basic law was adopted long before the emergence of the Internet and does not contain provisions expressly dedicated to online gambling. Instead, regulation is formed through secondary legislation, administrative practice, and interpretations by the regulator — the Ministry of the Interior (SEGOB). As a result, the online format is allowed exclusively as an extension of licensed offline activity, rather than as an independent type of business.
In this article, we will examine how to start a online casino in Mexico,how the model actually works, what legal restrictions must be taken into account, and what steps are realistically required to enter the market.
Legal status of online casinos in Mexico
Are online casinos legal in Mexico
The question of the legality of online casinos in Mexico cannot be considered in the binary logic of “permitted / prohibited.” The Mexican gambling regulation model is structured differently: online gambling is not regulated directly, but is allowed through the administrative practice of the regulator.
Basic law: Ley Federal de Juegos y Sorteos
The federal law Ley Federal de Juegos y Sorteos was adopted in 1947 and remains the foundation of gambling regulation in Mexico to this day. Its key principle is a general prohibition of gambling with a list of permitted exceptions that may be authorized by the state.
The law was originally designed for offline formats and does not contain a single reference to the Internet, online platforms, or remote betting acceptance. This means that online casinos are not directly prohibited, but neither are they legalized by a specific provision.
It is precisely this circumstance that allowed the regulator to form the current model for admitting online activities.
Regulations and the role of SEGOB
Practical regulation of gambling is carried out not by the law itself, but by its regulations and administrative decisions of the Mexican Ministry of the Interior (Secretaría de Gobernación, SEGOB). Within the structure of SEGOB, the key authority is the Dirección General de Juegos y Sorteos (DGJS) — it is this body that issues permits, supervises operators, and determines acceptable business formats.
SEGOB acts as the central regulator for one reason: the law grants it exclusive powers to interpret and apply gambling regulations.
Online casinos as an extension of an offline license
Online activities may be carried out exclusively within the framework of a license issued for a land-based casino or bookmaker operations.
The legal logic of the model is as follows:
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SEGOB issues a permit (permiso) for a specific type of gambling activity;
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the online format is treated as an additional channel for providing the same service, rather than as a new line of business;
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the operator must prove that the online casino platform, casino software, and casino platform infrastructure are technologically, financially, and legally controlled by the same license holder.
For this reason, launching an online casino in Mexico is possible only through a licensed offline operator. The absence of one’s own offline license automatically excludes the possibility of legal online operations, regardless of the presence of foreign licenses or company registration outside the country.
Requirements for online casino operators in Mexico
The regulator’s key requirement is that only a Mexican legal entity may act as the applicant and operator of gambling activities. This rule applies regardless of whether it concerns a land-based casino or an online platform as an extension of a license.
At the same time, Mexican law does not prohibit foreign ownership. Founders and beneficiaries may be foreign individuals and legal entities, provided that the ownership structure is properly disclosed and tax and corporate law requirements are met.
In practice, the following legal forms are most commonly used:
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S.A. de C.V. (Sociedad Anónima de Capital Variable) — an equivalent of a joint-stock company and the most common format for iGaming projects using online casino software from an iGaming software provider;
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S. de R.L. de C.V. (Sociedad de Responsabilidad Limitada) — an equivalent of a limited liability company, suitable for closed structures with a limited number of participants.
Both forms are recognized by SEGOB as acceptable for gambling operations. The law does not establish minimum share capital requirements; however, in practice, the regulator assesses the company’s financial capacity through reporting, sources of funding, and bank guarantees.
Why a foreign operator cannot obtain a license directly
Despite the admissibility of foreign participation in capital, a foreign company cannot obtain a SEGOB license directly. This is due to a combination of legal and practical factors.
First, Ley Federal de Juegos y Sorteos and its regulations proceed from the assumption that a permit is issued to an entity fully subject to Mexican jurisdiction. A foreign legal entity does not meet this criterion.
Second, the administrative practice of the DGJS has for many years consistently refused to consider applications submitted directly by foreign companies. Even with international licenses, such applications are not deemed admissible.
Third, attempts to circumvent these requirements through nominee structures or fictitious management agreements are classified as grey or illegal schemes. The main risks of such models include:
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refusal to approve online activities;
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revocation of the partner’s existing permit;
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blocking of payment channels;
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lack of legal protection in Mexico.
For this reason, any projects that do not rely on a full-fledged Mexican legal structure and SEGOB approval are considered high-risk.
Partnership model with a licensed operator
The only legal model for entering the Mexican online casino market is a partnership with a licensed operator holding a valid SEGOB permit — the so-called permit holder.
The permit holder is a company that has a license for a land-based casino or bookmaker activity issued by the DGJS. It is this company that formally acts as the online casino operator before the regulator, even if the actual platform, brand and casino software for sale solutions belong to the partner.
Legally, such a model is structured through:
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a joint activity or strategic partnership agreement;
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an agreement for the provision of a casino platform or gambling software provider technology;
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a revenue and liability distribution agreement;
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in some cases — acquisition of an equity stake in the permit holder.
In practice, several standard cooperation formats are used:
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Revenue share — a percentage of GGR or NGR in favor of the licensed operator;
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Fixed fee + percentage — a combined model;
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Equity partnership — acquisition of a stake in the licensed business.
It is important to note that since 2023–2024 SEGOB has tightened control over such schemes. The regulator requires that the permit holder retain real operational and legal control over the online casino software and platform, rather than acting as a nominal party.
How to launch an online casino in Mexico: a step-by-step guide
Launching an online casino in Mexico is a sequential process in which each step depends on the previous one. An error or omission at almost any stage usually leads to a refusal by the regulator or significant delays.
Step 1. Company registration in Mexico
As a rule, an S.A. de C.V. or S. de R.L. de C.V. with foreign shareholders is registered. The procedure includes:
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company registration with a notary;
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obtaining a tax number (RFC) from the SAT;
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opening a corporate bank account;
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issuing powers of attorney to local representatives.
The physical presence of the founders in Mexico is not required — the process may be completed remotely through a legal representative.
Step 2. Selecting a licensed partner
The key stage of the entire project is the selection of a permit holder with a valid SEGOB license. The status and reputation of the partner directly determine the feasibility of approving the online format.
At this stage, the following are carried out:
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legal due diligence of the license (validity period, restrictions, history);
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analysis of the partner’s relationship with the regulator;
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assessment of its willingness to retain operational control.
It is important to consider that the regulator takes a negative view of partners who provide licenses purely on a nominal basis. The permit holder must be genuinely involved in the project.
Step 3. Legal and commercial deal structure
After selecting a partner, the contractual architecture of the project is formed. This block is most frequently analyzed by SEGOB when making its decision.
Typically, the structure includes:
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a partnership or joint activity agreement;
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an agreement for the use or management of the casino online platform;
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a financial model (revenue share, fixed payments, hybrid);
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allocation of responsibilities, including AML/KYC and payout obligations.
At this stage, it is critical to ensure consistency between the contractual model and the actual operating scheme. Any discrepancies are regarded by the regulator as a risk.
Step 4. Platform preparation and certification
The online casino platform must be technically ready before submitting documents to SEGOB. The regulator does not review projects without confirmed certification. For those who decide to buy casino software.
Preparation includes:
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configuring the platform for the Mexican market;
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integration of payment solutions;
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implementation of KYC and AML systems;
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preparation of reporting and transaction logging.
A mandatory requirement is an audit of the RNG and key systems by an accredited laboratory (for example, GLI or BMM Testlabs). The certificates are attached to the application and reviewed by the regulator.
Step 5. Submission of documents to SEGOB
The application to the Dirección General de Juegos y Sorteos is submitted exclusively by the permit holder. The document package includes:
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corporate documents of the license holder;
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agreements with partners;
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technical documentation of the platform;
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audit certificates;
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financial guarantees and confirmation of sources of funds.
At this stage, additional requests from the regulator are possible. Their prompt and accurate resolution is critical for meeting deadlines.
Step 6. Launch and operational activity
After receiving SEGOB approval, the online casino may be launched for commercial operation. However, regulatory supervision does not end at this stage.
The operator is required to:
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regularly submit reports;
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comply with tax and AML requirements;
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ensure platform control by the permit holder;
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respond promptly to regulator requests.
Any material changes in the project structure, platform, or partnership relationships require additional approval.
Taxes and the financial model of online casinos in Mexico
The economic model of an online casino in Mexico is formed at the intersection of federal legislation, regional rules, and commercial agreements with the licensed permit holder. Understanding the tax burden and revenue structure is critical for assessing project profitability and planning investments.
Federal taxes
The main federal taxes for online casinos include:
1. IEPS (Impuesto Especial sobre Producción y Servicios)
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A special tax on production and services applied to gambling activities and betting.
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Rates vary depending on the type of activity, but on average amount to 20–30% of the operator’s gross revenue.
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The tax is paid by the permit holder, who then distributes income under the partnership model.
2. Corporate Income Tax (ISR, Impuesto sobre la Renta)
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Standard corporate income tax.
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The rate is 30% for legal entities, including income from gambling activities.
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ISR is calculated on the basis of net profit after deducting expenses, including partner payments and operating costs.
Regional and indirect fees
In Mexico, federal regulation is supplemented by state and municipal taxes, which may vary significantly:
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Role of the states: each Mexican federal entity has the right to levy fees on gambling activities, including licensing, patent payments and turnover taxes.
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Potential differences: in some states the rate may reach 5–10% of revenue, in others it may be limited to fixed payments.
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For online casinos, it is important to consider the location of the permit holder, since its jurisdiction determines regional fees.
In addition, indirect taxes may apply, for example VAT (IVA), if payment systems or service providers are located in Mexico.
Technical and regulatory requirements for online casinos
Operating an online casino in Mexico requires compliance with strict technical, compliance and social responsibility standards. These requirements build user trust and allow the operator to remain within the law.
Platform certification
The random number generator (RNG) is a key element of the platform. SEGOB requires proof of fairness and unpredictability of game results. To confirm compliance, international standards are used:
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GLI (Gaming Laboratories International) — RNG and platform audit;
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BMM Testlabs — an alternative laboratory for certification of games and betting management systems.
Platform certification includes:
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verification of the random number generator;
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testing of games for compliance with rules and payouts;
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verification of payment system integration and reporting.
Only a certified platform can be submitted to SEGOB when extending a license to online activities.
AML, KYC and financial control
Mexican legislation requires strict compliance with anti-money laundering (AML) and customer identification (KYC) rules:
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Control is carried out through the Unidad de Inteligencia Financiera (UIF), which monitors suspicious transactions and cooperates with banks;
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All payment systems, including cards, e-wallets and cryptocurrencies (where permitted), must be integrated with AML/KYC processes;
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The platform must maintain full financial reporting and provide it to the regulator upon request.
These measures are aimed at preventing financial abuse, fraud and ensuring income transparency.
Responsible gaming and restrictions
SEGOB and international practice require the implementation of responsible gaming mechanisms:
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Minimum player age: 18 years. The platform must ensure blocking of minors;
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Bet and deposit limits: the ability for a player to set personal restrictions;
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Self-exclusion: players must be able to temporarily or permanently exclude themselves from play;
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Marketing restrictions: targeted promotion of gambling to vulnerable groups is prohibited.
Main mistakes when launching an online casino in Mexico
Despite the apparent “gray zone” for online gambling, SEGOB actively monitors violations and forms a practice of refusals. Based on the analysis of real cases, four key mistakes can be identified that most often lead to problems.
1. Operating without a licensed partner
An attempt to launch an online casino without a permit holder license is considered a violation of the law. Even if a company is registered in Mexico and holds a foreign license, the project will be deemed illegal. Consequences include payment system blocking and the risk of criminal liability for company management.
2. Using “rented” licenses
Some operators attempt to use third-party licenses nominally (“rent”). The regulator reacts extremely strictly: the actual control of the permit holder over the online platform is проверяется. Any inconsistencies may lead to:
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revocation of the permit;
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fines;
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a ban on cooperation with other projects.
3. Underestimating the tax burden
The mistake lies in incomplete accounting of IEPS, ISR and regional fees, as well as payments to the permit holder under the partnership scheme. Incorrect calculations:
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reduce project margins;
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create a risk of tax audits;
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may affect approval of license expansion.
4. Ignoring future reforms
Mexican gambling regulation is in the process of being updated. Ignoring:
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possible changes to Ley Federal de Juegos y Sorteos;
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tightening of SEGOB control;
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AML/KYC and certification requirements;
may lead to unexpected additional requirements or refusals when renewing a license.
Conclusion
Mexico remains a strategically attractive market for online gambling. A limited number of licensed operators and strict regulatory control create both a barrier for new players and a high revenue potential for those who operate legally and in a structured manner.
Who Mexico is the right market for:
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Companies with sufficient investment willing to build partnerships with a licensed permit holder;
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Operators focused on long-term and stable income rather than a quick “gray” entry;
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Projects capable of ensuring technical and financial transparency, compliance with AML/KYC and responsible gaming requirements.
When it makes sense to enter now:
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The market remains concentrated, with a limited number of permit holders, which increases the strategic value of partnerships;
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Tightening regulatory control makes timely proper structuring a decisive success factor;
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Current legislative reforms still allow new participants to safely plan entry through existing license holders.
