Playtech cautions partners on Mexico and Colombia tax plans as Brazil market stabilizes

Playtech executives are advising partners to tread carefully in Latin America as the region presents both growth potential, particularly in Brazil, and regulatory risks, with Mexico and Colombia reviewing significant tax changes that could impact operator sustainability.

In Mexico, lawmakers are considering raising the gross gaming revenue (GGR) duty from 30% to 50% as part of the 2026 Budget.

Playtech CEO Mor Weizer told SBC News the company is evaluating the potential impact and drew comparisons with European markets where similar moves had unintended results.

“We’ve seen from international developments like the Netherlands that increases in the gambling tax can have unintended consequences,” Weizer said. “Over there, this has caused a reduction in marketing investments and some operators leaving the market, as well as an increased activity of unregulated platforms.”

“While obviously we would prefer the tax level in Mexico to remain the same, we can’t really foresee what the impact an increase will have, and we are still in the process of evaluating.”

Colombia has also raised concerns, with discussions underway about making a temporary VAT tax a permanent requirement. Weizer said the country remains important for Playtech but noted that additional taxation could pressure the market.

Brazil market developments

Playtech revenue in Brazil has fluctuated since regulated betting was introduced in January, though company executives reported that performance is stabilizing.

“Brazil has the strictest set of regulations worldwide, even when compared to the US, and they introduced a very strict onboarding process that at the start led to a high level of rejection rates,” Weizer said in the interview.

“However, we now see GGR returning to very similar levels to what we saw prior to the market’s regulation. Estimates suggest a market value of $6bn by the end of this year, and an expected growth of 15% between now and 2030, reaching $17bn.“

“While it took the market some time to adjust to the new regulations, I believe that from this point onwards we will see accelerated growth. This is a very big opportunity for us. We believe Brazil is one of the most promising countries for the gaming industry in the coming years.”

Mexico partnership

Despite regulatory uncertainties, Playtech deepened its presence in Mexico through a 30.8% equity stake in local operator Caliente. Chief Financial Officer Chris McGinnis said the partnership plays an important role in the company’s long-term plans.

Playtech’s first-half financial results were also influenced by the completed sale of Snaitech to Flutter Entertainment. The transaction reinforced the company’s transition toward a B2B focus and provided additional capital.

McGinnis said the company is keeping options open regarding how to use the proceeds, from mergers and acquisitions to potential shareholder returns.

“We have a very strong balance sheet, and I think the best thing that it does is give us flexibility that we can look into all of these options,” McGinnis said. “We’ve always had an M&A strategy. When we first acquired Snaitech, it was part of that strategy. We still have that, and we’re regularly looking at M&A opportunities.”

“In terms of organic growth, our business can fund its expansion, for example, into markets like Brazil. With our balance sheet as well, we’re looking at capital allocation more and more closely. In the future, I expect returns to shareholders either through dividends or buybacks to be a part of that as well.”

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