Latin America is home to several promising iGaming markets, and Mexico is among its leaders. This country with a wide audience of gamblers and strong economy will be a great choice for diversifying the reach of any online casino.
Read to the end to learn why so many investors and entrepreneurs see Mexico as one of iGaming’s golden opportunities.
The United Mexican States
The United Mexican States, or simply Mexico, is one Latin America’s most prominent countries, outstripping most of its neighbors in terms of population, economic progress, and technical development.
Despite having its ups and downs in the past, Mexico is emerging as one of the region’s economic powerhouses, producing oil and silver and providing exportable goods and valuable services. Numerous free trade agreements, especially with the US and Canada (NAFTA), gave a significant boost to the Mexican economy. With a GDP of $1.27 trillion as of 2021, Mexico is now not only the second-largest economy in the region after Brazil, but also the 15th largest economy in the world.
Mexico is also home to a massive and diverse population. Many of the Spanish-speaking population of about 130 million embrace their Mestizo heritage (a blend of Spanish and Indigenous), but there are plenty who embrace the identity of their African, Middle Eastern, Asian, and European ancestors.
No matter their origin, the people of Mexico are passionate about games of chance and sports betting. Some games are even essential to Mexican culture: a local version of bingo called Lotería, which uses iconic folk illustrations instead of numbers, is traditionally played at family gatherings.
Gambling market overview
The gambling industry plays no small role in Mexico’s economy; the country’s land-based and online gambling markets are estimated to generate around $2 billion yearly. As if that were not enough, the industry is expected to grow by 33% in the next three years, as new businesses leap into this energetic market.
The gambling market was dominated by the land-based sector until the outbreak of COVID-19. With no offline options, the players turned their attention to iGaming, creating a huge surge in demand for online casinos; a 2021 survey from YouGov indicated that 63% of respondents in Mexico even prefer gambling online to offline.
A crucial contribution to this development is increasing mobile broadband availability. Mobile connection is a more affordable way of accessing the internet in Mexico, so casino operators should necessarily adapt their products to mobile formats. To hop on the trend, casino operators could also consider mobile gambling options such as our Telegram Casino solution, which delivers an entire casino through a bot in the popular mobile messaging application.
Land-based gambling regulations
Gambling in Mexico is regulated through a complex legislative framework. There are two main pieces of gambling legislation: the Federal Gaming and Raffles Law of 1947, which prohibits all forms of gambling except for sports betting and raffle number games, and the Regulation of the Federal Gaming and Raffles Law of 2004.
While the 1947 law created a framework for gambling regulations, it didn’t offer much in the way of regulations themselves (especially with regards to modern types of gambling) which is why the 2004 regulations were passed. For example, casino games were prohibited by the 1947 law, but were ultimately authorized by the interpretation of later regulations. A further piece of legislation — a presidential decree from 2013 — was needed to set rules of operation for gaming machines.
In addition, Mexico’s governmental system — a federation of 32 states — adds another layer of complexity to the regulations. Whatever is not ruled by the federal laws can be regulated individually at the state level. Land-based casinos are subject to a complicated chain of permits and prohibitions: after being originally prohibited by the 1947 law (which in fact is still valid and used to regulate the market), they were later legalized through a series of court interpretations and legislation issued by individual states. Currently, many casino venues operate in Mexico, but without formal licenses.
However, putting those complexities aside, generally all kinds of land-based gambling (casinos, gaming machines, sports betting, etc.) are legal in Mexico except for card rooms. It is only allowed to offer card games as part of casino facilities. Lotteries, like in many other countries, are under state control. The rest of the industry is regulated by the Ministry of Interior (SEGOB), through the Gambling and Raffles Bureau, and is subject to licensing at the state level.
iGaming regulations in Mexico
The regulation of remote gambling is as convoluted as the land-based sector. The 2004 regulations expressly provide only for online betting and raffle number games, leaving all other gambling activities in the gray zone. In 2021, the National Regeneration Movement published draft guidelines that would establish clearer regulations for the whole gambling industry, yet as of February 2023, the regulations remain unpassed, with no progress on the horizon.
Online operators offering gambling services that are subject to regulation do not require licenses, but must gain authorization from the gambling authority before starting operation. In addition, they should either incorporate in Mexico, or establish a partnership with any local license-holder. Both land-based and online operators are subject to a 30% income tax.
Gambling services not mentioned in the regulations depend on the attitude of individual states, as there are no clear restrictions, no technical requirements, no certifications or licensing, and not even an explicit definition for iGaming at the federal level. Therefore, as with their land-based counterparts, online casinos were allowed through secondary legislation such as court interpretations and state regulations, and now operate without formal licenses.
Mexican citizens are completely free to gamble in offshore online casinos, and the state does not block gambling platforms without local licenses. Foreign online operators without any international license, however, are in danger of being blocked.
Mexican players’ game preferences
Slots make up the majority of casino games in Mexico. Mexican players enjoy bright, colorful animation, themed games (for example, games featuring local traditions like Día de Muertos) and slot tournaments.
Mexicans also have a long-lasting passion for raffle number games such as bingo and lottery in both retail and online versions. Traditional card games, especially Caribbean Poker, Texas Hold’em, and Stud Poker, are also a must — and don’t forget to include the live versions of all these games: this trend has been sweeping the continent.
Stacking your casino with the right content for a specific market is an essential yet complex part of any successful gambling business. There is a myriad of game providers to choose from, not mentioning the headaches of negotiating partnerships with each of them. Cooperating with game aggregators like Slotegrator can aid you in this process. With our APIgrator solution, you can integrate a selection of quality games to your casino in just one session.
Popular sports for betting
Much like the rest of Latin America, Maxicans are huge fans of sport, and where there is passion for sport, there is also passion for betting. Opening a sportsbook in Mexico would be a win-win move for online operators.
Far and away, the lion’s share of sports betting in Mexico goes to football. Bettors especially look forward to global events like the FIFA World Cup, but there’s more than enough enthusiasm to go around for local events like Copa Libertadores. Other popular sports to bet on include horse racing, American football and baseball.
Sports betting is expressly regulated in Mexico. Sportsbooks must establish a partnership with a locally licensed gambling operator and receive authorisation from the authorities before starting operation. Many foreign operators are taking advantage of this opportunity to enter the Mexican market (e.g. Bettson and Novibet through a deal with Big Bola, Mexico’s leading land-based operator), and this trend can only be expected to continue.
Payment methods for online casinos
Payment options that the Mexican players expect to see in an online casino differ from those of, for example, European players. While credit cards like VISA or Mastercard are a go-to option in Europe, data from WorldBank indicates that at the end of 2020, 86% of all payments in Mexico were made in cash, and only 37% of Mexicans had a bank account. Despite being par for the course in most markets around the world, simply offering credit card payments won’t cut it in Mexico.
Banked Mexican players without credit cards will benefit from bank transfers, while the rest will appreciate cash payment options. Mexico has its own local providers widely used at online casinos such as Teleingreso, Todito cash, and Oxxo. These methods all have the same working principle: when making a purchase, clients receive a transaction code that they can then use at any authorized store to pay with cash.
How can Slotegrator help?
Mexico is an uncut iGaming gem of Latin America. Despite a convoluted regulatory framework, the gambling industry is completely functional and promises great prospects. A country like that will become a great enhancement to your casino’s international reach.
However, establishing an online casino is easier said than done. Future casino operators have to go through a multitude of challenges ranging from bureaucratic tasks like navigating local regulations to technical issues related to platform development.
Happily, one-stop-shop software suppliers like Slotegrator are here to lend you a helping hand. We offer turnkey gaming platform development and White Label solutions to speed up the process of launching an online casino. Cooperating with us can help save time and money, eliminate potential mistakes, and stake your position in the iGaming industry of Mexico.