Peru's chief gaming regulator has declared that as of September all online gambling operators must be licensed and authorised in the country.
For the last few months Peru has been running slightly behind schedule in its plan to implement a regulatory and licensing regime for sports betting and online gaming.
Government officials initially said that the regulator would receive applications for licences from operators and service providers during a period of 30 days from mid-February to March, and that it would grant licences after another 30-day period, which should have ended around April.
According to Nicolás Samohod Rivarola, a gaming lawyer at Vidal Cáceres in Lima, the more delayed implementation is a good thing and reflects positively on the regulator.
“They are not giving peremptory terms or deadlines to comply, because they understand that this is a new business for everybody and the regulator does not want to harm anybody,” Samohod told Vixio GamblingCompliance.
“I have personally spoken with Yuri Guerra [general director of the casino regulator within Peru's Ministry of Tourism] and he tells me that he does not want anyone to be left out of the process or with the application annulled, null and void. So, he is giving deadlines. And if the deadline expires and you have not finished submitting documents or correcting observations, he is not going to close the file, he is going to wait for you.”
According to Guerra, the regulator has so far received 145 requests for licences for sports betting and online gaming from 80 different operators. As things stand, 43 applications have been authorised from just over 20 different companies, while 17 were denied.
Those 17 were not successful, Guerra said in an interview with Yogonet, because their applications were not completed correctly. The operators are welcome to reapply later. Guerra also said that regulators expect to issue 60 more licences in the next month.
Besides authorisations for operators, more than 200 gaming suppliers, payments processors and other entities have been registered as approved service providers in Peru. The regulator has also published a register of some 1,800 approved online casino games.
Samohod acknowledged that the technically laborious registration process has played a role in why some companies have failed to become registered so far.
“All registration is through the ministry's extranet, nothing is submitted physically, so the ministry's extranet, in some respects, is not very ... didactic. It is not very simple to include documents. For example, platform content providers, B2B game manufacturers, who have, for example, 100 games, have to register each game four or five times with the different versions that each game has.
“So, that's the reason why the deadlines are being lengthened so as not to hurt anybody.”
Taxation is also still a concern for the market.
The forms and declarations for online gambling taxes have not yet been published, so operators cannot yet declare their tax and pay it. Samohod also questioned how foreign companies not domiciled in Peru are going to pay tax.
“That issue is still not very well defined,” he said. “There is a gap.”
Then there is the issue of the selective consumption tax, which the minister of economy has proposed to extend to online gambling.
The proposed tax would be 1 percent of net gaming, a framework described by Samohod as “catastrophic, because 1 percent of the net gain is more or less 6 percent of the GGR calculated”.
The selective consumption tax, which is traditionally levied on the consumer to discourage them from purchasing certain goods like cigarettes, would be levied on the operator in the case of online gambling in Peru.
“The selective consumption tax cannot be transferred to the client, therefore, charging it to the operator is an anti-technical tax, it is illegal, it is a tax on the taxpayer, but it is still done in casinos,” said Samohod.
The selective consumption tax is included in Peru's law for sports betting and online gambling, but there was no rate assigned so it could not be applied as things stand.
“Of course, it is important for investors to know, but it is also not good to generate panic in the market because of a crazy congressman who wants to make an illegal bill,” Samohod said.
As for the intent of the Peruvian government to be able to block illegal sites, Samohod noted that “the legal basis to do so exists”.
“The operational part, the practical part, we have to see if they are going to be able to do it well."