Peru finally opens up to the regulation of online gambling
The Congress of the Andean country has approved by a large majority the consensual text that will lead to the regulation of gambling in Peru. The regulation of online gambling that without being exactly illegal was in a kind of legal limbo, especially sports betting that moves millions without it reverting, for now, in the coffers of the State, had long been being evaluated. Now, the Peruvian Congress has just taken the decisive step so that in Peru there is a common legal basis for face-to-face and distance betting.
Finally, the Peruvian Congress approved the text of a consensual law that regulates distance gaming and betting in the Andean country. ©Aidan Howe/Unsplash
With 91 votes in favour and none against , the Peruvian Congress approved the text that agrees the proposal of the executive with the initiatives approved in the Commission of Economy of the Congress on the regulation of games and bets at a distance.
The necessary steps have been taken, now it's MINCETUR's turn
The parliamentary procedure was necessary to reach a consensus between the different initiatives that were on the table. On the one hand, the executive, through the Ministry of Foreign Trade and Tourism (MINCETUR), had prepared the draft Law 2070/2021-PE for the Regulation of Distance Gaming and Betting . On the other hand, the Economy Committee in Congress had two bills in front of it, the one presented by congresswoman Diana Gonzales Delgado and that of legislator Martha Moyano.
In any case, by the middle of May and once the Congressional Committee approved the initiatives unanimously, there was an opportunity to agree on the proposals. Diana Gonzales had insisted a lot on the tax burden that would have to be allocated to support Peruvian sports, among other basic social services. Congresswoman Gonzales proposed a 20% tax base for remote sports betting and gaming . Very similar to the one that exists in New Zealand .
But this had to be confronted with the idea of the executive that was the one that finally prevailed. The text of the Law now approved by congress sets a 12% tax burden on net profits ( net win ) from online operators. This is a measure that may favor foreign operators to see with good eyes investing in the Peruvian online space that, according to the head of Foreign Trade and Tourism Roberto Sánchez, would have generated some a billion dollars in gambling last year without this being reflected in the public coffers.
As for the distribution of the income generated thanks to taxes, 40% will go to the public treasury, which it will dedicate 20% of it to health programs with special emphasis on the prevention of gambling addiction , another 40% will go to MINCETUR and will be destined mainly to the promotion of tourism, and the remaining 20% would benefit the Peruvian Sports Institute.
It will be the government agency MINCETUR that will be behind granting the authorizations for the operators that in the case of bets should get the extension bet.pe . It is still too early to know how the distribution of licenses will be and what will happen to the brands that already operate in the online space with domains .pe . In this sense, Minister Roberto Sánchez would have pointed out that they were looking at the most successful models in the region, a clear reference to Colombia and Argentina.
Debate and criticism on the tax burden
Although the approved text maintains that all operators, domiciled and not domiciled in Peru, have to be taxed in the same way, the Peruvian Association of Sports Betting (Apadela) showed its concern that the wording of the text is not as clear as required .
Apadela brings together the Peruvian sports betting operators Betsson, Betcris, DoradoBet, ApuestaTotal , Reta or TeApuesto, among others. The criticism of the business association focuses on the ambiguities when determining the legal entities susceptible to applying the tax to them, since they would have affirmed that the law exonerates de facto hundreds of foreign operators that are offered to Peruvian players but that lack any legal basis in Peru.
The concern is legitimate. If the Law does not make explicit the category of illegal gambling, there will always be room for operators to act "legally” simply by making use of the domain bet.pe . We will see how MINCETUR regulates the granting of licenses from now on and if there are going to be any special requirements as it happens in Argentina that requires local links for foreign companies. For now, online gambling and betting in Peru are already legal.
