Short answer: yes. Mexico taxes poker winnings as premios, prize income, and a Mexican casino that pays you must withhold income tax before the money reaches you. The federal rate is 1% of the prize in most of the country, and 21% in any state whose own tax on prize income runs above 6%. You cannot subtract your buy-in or net losing sessions against winning ones. Whether that withholding closes the matter depends on how much you won and what else you earned that year.
Please read this first. This is general information, not tax advice. Mexican prize taxation contains real ambiguities, and this article flags them rather than papering over them. What applies to you depends on your residence status, your total income and where you played. Before you file, take your numbers to a Mexican contador or tax lawyer.
Is poker even legal in Mexico?
Worth settling first, because the tax rules only work cleanly for legally authorised games. The Ley Federal de Juegos y Sorteos of 1947 opens by banning them: Article 1 prohibits games of chance and games with bets nationwide. Article 2 lists what may be permitted, namely chess, draughts, dominoes, dice, bowling, billiards, ball games, races, sport in general and sorteos, meaning draws, then closes with a blunt line: any game not listed is treated as prohibited. Poker is not on the list.
What makes Mexican poker rooms possible is Articles 3 and 4. Article 3 gives the federal executive, through the Secretaría de Gobernación, power to authorise games involving bets of any kind, and Article 4 forbids operating a betting venue without a SEGOB permit. Casinos run under those permits, and their poker rooms sit inside that structure. Whether poker is a game of skill outside the prohibition or a betting game covered by a permit has been argued both ways for years without clean resolution. For tax purposes, money paid by a permitted Mexican establishment is prize income from a legally authorised game.
Which tax bucket poker falls into
The Ley del Impuesto sobre la Renta, the income tax law, deals with prize income in Title IV, Chapter VII, Articles 137 to 139. Article 137 defines the category: income from lotteries, raffles, draws, games with bets and contests of every class, where these are legally authorised. Poker in a permitted Mexican casino is a game with bets. That is your category.
The category is fixed by the nature of the income, not by how seriously you play. A tourist who spikes one tournament and a player who grinds five days a week are both, on the face of the statute, receiving premios.
The withholding: 1%, and when it becomes 21%
Article 138 sets the rates in two separate paragraphs that people routinely mix up.
The first covers lotteries, raffles, draws and contests. Tax is 1% of the prize value per whole ticket, with no deduction, provided the state levies no local tax on that income or levies one not exceeding 6%. Where a state's local tax does exceed 6%, the federal rate jumps to 21%.
The second paragraph covers games with bets, which is the one that applies to poker. Tax is 1% of the total amount to be distributed among all winning tickets, for games organised in national territory.
Note the base: the prize, not your profit. The low rate is the trade-off for a regime that ignores your costs entirely.
| Situation | Federal ISR |
|---|---|
| Prize from a game with bets, organised in Mexico | 1% of the prize |
| Lottery, raffle, draw or contest, state tax 6% or less | 1% of the prize |
| Lottery, raffle, draw or contest, state tax above 6% | 21% of the prize |
How state taxes stack on top
Mexican states levy their own tax on prize income, and the federal 1% sits alongside it rather than absorbing it. Mexico City applies a 6% local tax on prizes, which with the 1% federal rate produces roughly 7% withheld in total, according to the Mexican tax outlet El Contribuyente. Because 6% does not exceed 6%, the 21% trigger is not pulled.
Honesty beats a clean table here. Rates vary by state, some states have experimented with taxing the amount wagered rather than the amount won, and proposals change. We could not verify a complete current state-by-state list from primary sources, nor confirm which states, if any, presently exceed 6% and so trigger the 21% rate. If you play outside your home state, have your contador check that state's fiscal code before assuming 7%.
Is the 1% the end of it?
Article 138 says the tax is withheld by whoever makes the payment and is treated as a definitive payment when the recipient declares it, being obliged to do so under the second paragraph of Article 90. Article 90's second paragraph requires individuals resident in Mexico to report, in their annual return, loans, gifts and prizes received during the year, where these exceed 600,000 pesos individually or together.
The next paragraph of Article 138 then says that individuals who do not make that Article 90 declaration cannot treat the withholding as definitive, and must add the prize income to their other income, crediting the federal withholding against the tax computed in their annual return.
Read literally, that looks like a trap for everyone below the threshold. The mainstream practitioner reading, set out by IDC among others, is more sensible: the 1% is definitive, and the 600,000 peso disclosure is the condition for keeping it definitive once your prizes, loans and gifts cross that line. Miss it when it was required and you lose definitive treatment, your winnings join your ordinary income, and they are taxed on the progressive scale reaching 35% for 2026 above 5,107,703.93 pesos. Expensive paperwork to forget.
A second threshold matters too. Article 150 requires individuals whose total income exceeds 500,000 pesos, counting exempt income and income already taxed definitively, to declare all of it in the annual return. A player on a normal salary plus poker prizes can be pulled into full reporting well before the 600,000 peso figure is in sight.
Can you deduct losses or buy-ins?
Under the prize regime, no. Chapter VII contains no deduction provision at all. Article 138 taxes the prize, expressly without deduction in the lottery paragraph and on the amount distributed in the betting paragraph. A year in which you win a 200,000 peso tournament and lose 250,000 pesos in cash games is, for Chapter VII purposes, a year in which you received a 200,000 peso prize. Mexican gambling sites sometimes suggest you can net losses or deduct the cost of your bets. There is no statutory basis for that, and we would not act on it without a written opinion from a contador willing to sign their name to it.
Recreational player or professional?
Mexican law has no professional gambler regime and no equivalent of the US trade or business test. This is a genuine gap, not a settled answer, so here is the shape of the argument.
Some advisers hold that a player who plays habitually, with organisation and a profit motive, is carrying on a business activity, moving them into Chapter II, Section I, covering business and professional income. That changes everything: RFC registration, monthly provisional payments, issuing CFDIs, deductible expenses, and the progressive scale up to 35% instead of a flat 1%. For heavy travel costs and a modest win rate that can be better. For one big score it is much worse.
The difficulty is that the definitions do not fit. Article 100 defines business income as income from commercial, industrial, agricultural, livestock, fishing or forestry activities, and Article 16 of the Código Fiscal de la Federación fleshes those out, with commercial meaning what federal law treats as mercantile. Playing poker is not naturally any of them, and we found no published SAT criterion or binding precedent resolving it either way. Be wary of anyone who says the answer is obvious, and get advice fitted to your volume.
What the casino actually does when you cash
Article 139 sets out what the payer owes you. Besides withholding, whoever hands over the prize must give you a CFDI, the Mexican digital tax receipt, showing the amount of the transaction and the tax withheld and paid over. They must also provide a record of income and a CFDI for prizes on which no tax is due, and keep the underlying documentation as the Código Fiscal requires.
So when you cash a tournament at a permitted Mexican casino, expect the payout net of withholding, and expect a document evidencing it. Ask at the cage before you leave. Without that CFDI you cannot prove to SAT that the tax was already paid, and you can end up paying twice.
Cash games are messier. The statutory base for games with bets is the amount distributed among winning tickets, language built around a tournament prize pool rather than a pot pushed across a table. How rooms handle cash game wins varies, and we found no legal source settling it. Do not assume that because nothing was withheld, nothing is owed.
Online play and offshore sites
Online poker follows the same principle. Article 138 applies to games with bets organised in national territory, so a licensed Mexican operator withholds the same way and should issue the same documentation.
Offshore is where players get careless. A site outside Mexico that withholds nothing has not made the income invisible. Article 1 is unambiguous: residents of Mexico are taxed on all their income, whatever the location of the source of wealth. Nothing withheld means nothing paid yet, and the duty to report sits with you.
The state is not ignoring this. From 2026, Article 2 of the Ley del Impuesto Especial sobre Producción y Servicios taxes games with bets and draws at 50%, up from 30%, and now expressly reaches games run over the internet by foreign residents with no establishment in Mexico. That tax falls on operators, not on you, but it shows where the attention is pointed. Standard 16% VAT also applies to gambling services.
Winning abroad as a Mexican tax resident
If you are resident in Mexico and cash in Las Vegas, Barcelona or Punta Cana, that money is within Mexican tax. What does not apply is the 1% mechanism, because Article 138 is limited to games organised in national territory. Practitioners generally treat foreign prize income as accumulating to your other income and taxed on the ordinary progressive scale.
The relief is Article 5, which lets Mexican residents credit income tax paid abroad against their Mexican liability, subject to a limit computed on the foreign-source income. That matters in the United States, which applies a general 30% withholding to income paid to nonresident aliens. Residents of some treaty countries are exempt. We could not confirm from the IRS treaty tables whether Mexico is among them, so verify with your contador before planning around it, and keep your US Form 1042-S as evidence for the credit.
If you are not a Mexican tax resident, Article 169 covers you. Prize income has its source in Mexico when the game is held there, presumed when the prize is paid there, and the same 1% and 21% rates apply, collected by withholding when the payer is Mexican.
Filing mechanics
Article 150 requires individuals to pay their annual tax by filing a return in April of the following year: the Declaración Anual de Personas Físicas, filed through the SAT portal, which pre-fills from CFDIs already reported by whoever paid you.
- Confirm whether you must file at all, remembering the 500,000 peso rule in Article 150.
- Check whether prizes, loans and gifts together crossed 600,000 pesos, triggering the Article 90 disclosure that protects definitive treatment.
- Reconcile the pre-filled figures against your own CFDIs. Pre-filled data is a starting point, not an audit.
- Claim credit for withholding not treated as definitive, and for foreign tax under Article 5.
What records to keep, and why sessions matter
SAT works from documents. CFDIs and constancias under Article 139 cover the prize side, but only what a Mexican payer processed. They will not show your offshore results, your foreign trips, or the losing sessions that explain how your bank balance moves.
Keep, for every session: date, venue or site, game and stakes, buy-in including rebuys and add-ons, cash-out, profit or loss, and currency. Keep the CFDI or constancia for anything withheld, the 1042-S or equivalent for foreign withholding, and enough travel evidence to place you where your results say you were.
This is not busywork. If you or your adviser conclude your play is a business activity, a contemporaneous log is the foundation of the entire filing. And if SAT ever queries unexplained deposits under the discrepancia fiscal rules, a dated session history is the difference between a documented answer and an argument. Logging each session as you play, with date, venue, buy-in, cash-out and result, is what PokerCharts is built to do, and it turns April into an export rather than a reconstruction from memory.
One last time: check all of this against your own facts with a Mexican contador before you file.