Criticism Of Peru's Online Gambling Law Continues

July 22, 2022
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The fallout continues from Peru’s rush to legalise online gambling last week, with industry insiders weighing in on the detrimental effect of merging two bills into one without careful examination of the text, which appears contradictory in several places.

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The fallout continues from Peru’s rush to legalise online gambling last week, with industry insiders weighing in on the detrimental effect of merging two bills into one without careful examination of the text, which appears contradictory in several places.

Gonzalo Pérez, CEO of Apuesta Total, a leading operator of retail and online sports betting in Peru, expressed several misgivings with the bill, which was passed by the Peruvian Congress after midnight on July 15.

“The approval of the law did not have the previous discussion that we expected and it was approved in a hurried manner during the early hours of the last day of the legislative period, with the objective that both the executive and the legislature show achievements that will improve their popularity, in view of the low popularity of both branches of government,” he told VIXIO GamblingCompliance.

Pérez said that one pending bill for sports betting was merged with a broader bill for all forms of online gambling introduced by the Peruvian government in May, resulting in a final text rife with errors.

As previously reported by VIXIO, the approved bill enables both Peru-based and non-domiciled companies to apply for licences for sports betting and online casino games. However, Article 40 of the bill, which establishes who will pay an excise tax of 12 percent on gross revenue, leaves out any explicit reference to operators incorporated abroad, meaning they would not be required by law to pay.

In addition, a consumption tax of 1 percent for every bet placed, which caused uproar when it was included in drafts, was purportedly omitted in the final draft of the legislation, with an official summary of amendments to the bill attached as the final page of the measure stating as much.

However, as Pérez points out, other sections of the bill explicitly modify the laws applicable to Peru's Selective Consumption Tax to include remote sports betting.

“Therefore it is a contradiction, even more so because it does not establish the rate nor does it grant the regulation of this power, generating a void in its application.”

Why did Peruvian congressmen rush to pass the bill without reviewing these questions?

According to Pérez, the expedited approval was “in response to the government's need to recover its battered image. Even yesterday [July 20] in the Council of Ministers, the Minister of Foreign Trade publicly asked the Congress to hurry in sending the law to the Executive so that it can be approved.”

In a press conference of the Cabinet, or Council of Ministers, Roberto Sánchez, the head of the Ministry of Foreign Trade and Tourism (MINCETUR), defended the importance of passing the online gambling law, emphasising the need for new tax revenues that will be allocated, in part, to reviving the national tourism industry.

“It’s so important for the connectivity of the tourism sector ... linked for example to loss of jobs [and] eventually also to cancellation of reservations of flights,” Sánchez said.

A few days after its approval in Congress, there has yet to be any formal discussion of revising the text. The legislation, as it stands, should enter into effect 60 days after it is approved by the President and published in the official gazette.

A further decree will follow from MINCETUR within 120 business days of publication to regulate the law.

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