The Congress of Peru has sanctioned a series of amendments to its pending Gambling Law of 2022 to rectify loopholes in how online gambling will be regulated in the South American nation.
These changes come following industry criticism of the initial hastily enacted legislation, which held several discrepancies and allowed gaps for potential tax evasion.
In a vote that saw 105 in favour and no votes against, one key revision includes a change in Article 40, eliminating the loophole that could have exempted foreign companies from paying a headline tax. Under the new law, local and foreign companies providing gaming and betting services must pay 11.76% of revenue as tax.
Parliamentarian and former Congress leader Lady Mercedes Camones (APP), who proposed the modifications, said that the “initiative aims to ensure tax collection, prevent money laundering, verify that customers participate safely in this activity and collect the corresponding tax”.
The legislator emphasised the intention of the new legislation to establish legal equality for all operators, regardless of their nationality.
The legislation has further increased the minimum financial guarantee from approved operators, which was initially set at 200 Peruvian tax units (circa $270,000). The fee has been significantly increased to 600 Peruvian tax units (+$500,000) or 3% of annual gross revenue.
Additionally, the new law extends the opportunity for foreign residents and tourists to register and play with Peruvian operators. The provision aims to make the digital gaming space more inclusive, unlike the earlier restriction that only allowed Peruvian nationals to register.
The domain allowance for licensed online gambling operators has also been expanded. Instead of the single permitted domain in the previous legislation, such as bet.pe, licensed operators will be able to use a variety of domain URLs, including .com.pe, .pe, .bet, and .bet.pe, reducing migration costs.
Of wider importance for stakeholders, the revised law also introduces changes to the Peruvian Penal Code, now making it a crime for online operators to function without a license. Violators risk a penalty of one to four years in prison.
However, concerns remain over the extended transition period of 120 days from the decree’s publication to the law’s enactment as detailed by Carlos Fonseca Sarmiento, a Peruvian gaming lawyer, who expressed concerns of no ample time frame offered to “operators in the grey market to transition legal offering”, as Peru’s Ministry of Foreign Trade and Tourism expects a surge in licensing requests from foreign business.
The government of Peru expects the amended law to generate substantial revenue. According to the National Vice Minister of Tourism, Madeleine Burns, the new regulatory framework could yield $160 million a year, distributed among Tourism, Sports, and Health sectors.
As stands, the law awaits the signature of President Dina Boluarte to authorise the foundation for Peru to launch its online gambling framework.