President Pedro Castillo Approves Online Gambling Regulation Bill

A month after Peru’s Congress voted 91 yes, 0 no and 7 abstentions on a new bill to legalize and regulate online sports betting and gambling in the South American country, the President Pedro Castillo signed the bill numbered 31,557 and made it into law. at a special ceremony held at the Government Palace.

The new legislation will come into force 60 days after its promulgation in the official newspaper, El Peruano, and will introduce a 12% tax on the net income of online sports betting and gaming operators payable on a monthly basis. There will also be a 1% Selective Consumption Tax (ISC) to levy on players.

Speaking at the signing ceremony, President Castillo highlighted that “for the first time, a special tax is being created” for online sports betting and gambling operations, which will allow Peru “to have more resources to meet its economic and social obligations”. and to “generate an annual collection of approximately $40 million for the state.”

The proceeds of the tax will be shared equally between the Ministry of Foreign Trade and Tourism, the Ministry of Health and the Peruvian Institute of Sports, after 20% will have been collected by the National Treasury.

The Peruvian President commended the collaborative efforts of the country’s executive and legislative branches to promote “growth and development for the benefit of all citizens” and stressed that the adoption of the new online gambling legislation “represents a important step towards the formalization of activities that until today had operated without any type of regulation or oversight.

“The executive branch and Congress have agreed on the need to establish a regulatory framework so that these operations are fully controlled, paying taxes and respecting the appropriate conditions.”

Some Tax-Related Concerns by Stakeholders

In July, shortly after the Congress of the Republic passed the Remote Gaming Regulation Bill, the Peruvian Sports Betting Association (Apadela) expressed concern that casino sites and online betting companies offering fast withdrawals to players operating in the Peruvian market from offshore locations are in practice tax exempt as nothing in the new law requires them to establish a branch in the country.

“The law puts unfair competition on the table because it imposes a tax that does not take into account companies operating from abroad without a branch in Peru,” Apadela’s statement said. “Furthermore, there is no real requirement on the recently approved regulations to establish a branch to operate in the country.”

“Congress exempts from the payment of this tax about 100 offshore companies that are not physically in Peru, but operate in the country through their digital platforms,” ​​explained the representatives of the sports betting association.

Nonetheless, Apadela expressed support for the new online gambling legislation after President Castillo approved it.

Authorities rush to raise revenue during FIFA World Cup in Qatar

With the next FIFA World Cup fast approaching and football fans eagerly awaiting matches in Qatar in November, Peruvian tax experts stress that the country should place a high priority on opening the market quickly. online sports betting to reap good income from the large number of expected bets.

“As it is an annual tax, its effects are immediate. Apparently we are still awaiting settlement [to come into force], but the supervisory ministry has 120 days to present it. I understand that they are rushing because there will be a large number of bets at the end of the year,” commented Francisco Pantanoso Velloso da Silveira, director of the Master in Taxation at the Universidad Peruana de Ciencias Aplicadas (UPC).

According to Eduardo Sevilla, director of casino games and slot machines at the Ministry of Foreign Trade and Tourism (Mincetur), the ministry that will be in charge of online sports games and betting, when the new law comes into force 60 days after its promulgation, the operators “will receive the authorization and [will be able to] Register.”

The law states that online gambling companies must register with the Single Registry of Taxpayers (RUC), establish a legal representative in Peru, and use the “.pe” web domain for their website. Failure to comply with these requirements will mean that the operator cannot sign sponsorship and advertising contracts.