The two bills on the docket to regulate sports betting and online gambling in Peru were the centre of attention at the Peru Gaming Show (PGS) last week, with operators grumbling that legislation was happening too quickly and was technically lacking.
Nicolás Samohod Rivarola, former legal director of Novomatic and current director of Studio Vidal Cáceres, explained the timing of the long-awaited regulation: “The new ministerial administration has just appointed a new General Director of Gaming (Eduardo Sevilla Echevarría), with the well and good intention of reactivating the Peruvian gaming industry in this post-pandemic period.”
“In other words, the new Peruvian law on sports betting and online gambling is imminent and is almost a reality,” he said.
The first piece of legislation discussed was Bill No. 168/2021-CR — the project of congresswoman Diana Gonzales — which proposes a tax base of 20 percent for sports and non-sports bets placed online.
Gonzales says that her bill, by regulating an unregulated market, will by nature help to eliminate money laundering and fraudulent companies that take advantage of players without legal protections in the online market.
Her bill, in particular, is meant to benefit sports in the country and Gonzales herself is a former volleyball player.
“Peruvian sport after the Lima 2019 Pan American Games receives less of the budget each year and also, due to the pandemic, the income that the Peruvian Sports Institute received directly through the Slots and Casinos Law and the rental of sports infrastructure has been reduced. For this reason, this initiative favours the promotion and financing of sports activities and our athletes,” she said.
According to Bill 168, tax revenue would go towards the Peruvian Sports Institute.
It also lists 12 different infractions, with penalties that range from fines to a revoked licence.
Granted licences are valid for six years, at which time they can be renewed. Licensing would be under the administration of the Ministry of Foreign Trade and Tourism (Mincetur).
The second piece of legislation was Law No. 02070/2021, a draft bill which was introduced in Congress in May. It would regulate online gambling and tax it at 12 percent. The bill is backed by Mincetur.
The proposed tax would be a direct tax on net income, with 40 percent of tax revenue going to the public treasury, 40 percent to Mincetur and 20 percent to the Peruvian Sports Institute.
At the PGS in a roundtable, which included Gonzalo Pérez, CEO of Apuesta Total, Andrea Rossi, the director of Betsson LatAm, Gonzalo Rosell of APADELA, and legal expert Carlos Fonseca Sarmiento, concern about the speed of both bills was expressed.
Speakers drew particular attention to the inclusion of a 1 percent consumption tax on net winnings. “It is evident that there is a lack of technical knowledge [of] the industry,” said Rosell.
Samohod Rivarola called the consumption tax “a madness” and “anti-technical”.
Luis Gama, the former director of lotteries in Uruguay, commented: “In some cases, the purpose of regulation has been lost sight of, and those who regulate do not do it well, it is very difficult to make progress and the investor is sometimes punished with excessive taxes. A higher tax rate does not mean more revenue … investments are withdrawn and the player turns to illegal gambling, which ultimately leads regulation to go against the initial objective.”
Rossi added that “it is very possible that by speeding up the process, mistakes could be made that are very harmful, not only for the current operators, but for all those who may potentially be interested in the future, in the Peruvian market”.
Law 02070 was approved by the Council of Ministers of Peru in late May and was defended before Congress by Roberto Sánchez, head of Mincetur, in early June.