Peru Introduces New Regulations for Sports Betting
In a significant development, Peru has introduced new regulations for companies involved in sports betting and online gambling.
According to the new regulations, these companies are required to contribute 12% of their net profit to the state. This measure aims to collect taxes to support the tourism sector, ensure full payment of winnings, and protect minors while preventing money laundering.
The Regulatory Framework
On October 13, 2023, the Minister of Foreign Trade and Tourism, Juan Carlos Mathews, highlighted the publication of Supreme Decree No. 005-2023-MINCETUR, which approves the regulation for Law No. 31557, amended by Law No. 31806.
This regulation establishes a framework for effective oversight of these games to benefit the country. It ensures the proper regulation of betting companies, protecting bettors, promoting responsible gambling, and transitioning the industry into the formal market.
The new regulation is set to take effect in 120 days, on February 9, 2024. During the 30-day period from February 10 to March 10, 2024, all operating companies offering sports betting and online gambling services must request authorization from the Ministry of Foreign Trade and Tourism to operate within the country.
Penalties for Non-Compliance
Companies that fail to comply with this regulation will be prohibited from operating in Peru. Those who accept the terms but do not adhere to the regulation will face penalties of no less than 150 tax units (742,500 Peruvian soles). Moreover, they could face criminal charges under the current Penal Code, leading to the company’s disqualification from operating in the country.
This regulation applies to all companies offering sports betting and online gambling services, whether they are domestic or foreign. Starting in April 2024, these companies are legally required to pay the specified special gambling tax, which amounts to 12% of their net profit.
Impact on Tax Revenue and Protection
The new regulations are expected to generate approximately 162 million Peruvian soles in annual revenue for the state. These funds will be invested in tourism reactivation, infrastructure projects, sports promotion, and mental health programs.
Importantly, the regulation ensures that winnings are paid in full, and it introduces mechanisms to protect players from potential non-payment of prizes. It also establishes online access controls to safeguard vulnerable groups, such as minors and individuals affected by gambling. Furthermore, the regulation addresses money laundering concerns by eliminating anonymity in betting.