Players will not be taxed

Peru approves law regulating sports betting and online gaming; sets net win tax at 12%

2022-07-15
Reading time 2:41 min

The plenary session of the Peruvian Congress approved a law creating a regulatory framework for the operation of online gaming and sports betting. The new legislation, which will come into force after being regulated by the Government through the Ministry of Foreign Trade and Tourism (Mincetur), imposes a direct tax on the Net Win of 12%.

In a parliamentary debate that lasted until the early hours of Friday morning, the alternative text that combined the opinion of the Economy Commission -drafted from the proposal of Congresswoman Diana Gonzalez Palomino- with the bill presented by the Executive -validated last week by the Foreign Trade and Tourism Commission- was approved with 91 votes in favor, none against and seven abstentions.

During the debate, Roberto Sanchez, the head of Mincetur and Congressman, stated that one of the agreements reached to draft the alternative text was to set at 12% the tax on the net win obtained by the online gaming and sports betting operators. It should be recalled that, in a previous interview with Yogonet, Congresswoman Gonzales anticipated that parties would try to elaborate "a consensual text" between the proposals of the Executive and the Parliament, so that it could be voted on and approved by the plenary, with a Net Win tax of 12%. 

Sanchez highlighted that such tax levels the online activity "with the activities that currently exist, such as casinos and slot machines" and establishes "an even floor" for both.

"At Apadela, we consider that 12% is a tax that allows us to continue investing and betting on the development of the industry," Gonzalo Perez, vice-president of the Peruvian Association of Online Sports Betting (APADELA), previously told Yogonet this week.

Moreover, Sanchez also highlighted in his speech that the law has the purpose of "dictating a responsible gambling policy to protect minors and people excluded from participating in games that are subject to regulation."



Peruvian congressman and head of Mincetur Roberto Sánchez

"Responsible and healthy gambling, in a social market economy and mobilizing more than $1 billion, is an activity that needs to be taxed. No one can generate profits without being taxed. The profits, then, are directed to health, education, development of tourism and sports," he remarked before the plenary.

Furthermore, the president of the Economy Commission, Congresswoman Silvia Monteza Facho, was in charge of supporting the ruling and, in her speech, she also detailed that the approved alternative text "removes the implementation of the selective consumption tax" to the players, proposed in the Executive's bill.

She also pointed out that "the discrimination of non-domiciled [online gaming and sports betting operators] is also eliminated so that they are taxed in the same way as those established in Peru."

Finally, the parliamentary referred to the destination of the income generated by the tax and indicated that of the 40% that was intended for the Public Treasury, it was decided to distribute the said amount in the following way: 20% for the Treasury and 20% for the Ministry of Health, which must direct the funds to mental health and gambling addiction prevention policies.

Meanwhile, the approved regulation also establishes a regime of infractions and sanctions, which may be: a warning, a fine from 1 to 200 UIT, cancellation of the administrative authorization, disqualification for 10 years, and permanent disqualification.

Likewise, the law states that in the case of granting operating licenses to land-based premises, the municipalities may only grant licenses to the owners of online sports betting gaming halls with prior authorization from Mincetur. It is also specified that the gaming halls must not be located less than one hundred and fifty meters away, according to the minimum pedestrian route, from temples or educational centers where basic education is provided on a regular basis.

Additionally, it is proposed that, at the request of Mincetur, the Ministry of Transportation and Communications is obliged to take the necessary actions to block websites, IP addresses, URLs, and/or computer applications through which online gaming and sports betting offers are made from unauthorized technological platforms. 

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