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Although the regulated market in Peru keeps developing, industry insiders highlight illegal operators and sports integrity issues as the key long-term challenges of the sector.
Carlos Fonseca, a gaming law specialist and CEO of Gaming Law SAC, emphasized in his opinion article in El Peruano that the success of the Peruvian regulatory approach hinges on the right balance of consumer protection, competitiveness of the market, and effectiveness of control and supervision. According to him, sports betting demand is “persistent and relatively inelastic“, especially during big international sporting events, and regulation is crucial to the development of the betting market.
He pointed out that regulators should not be focused only on tax collection and enforcement actions. They should prioritize redirecting consumers to authorized operators and creating a competitive legal market.
Offshore Platforms Are Distorting the Market
According to Fonseca, the top issue of the betting industry of Peru is illegal operators who continue providing their services without any state license.
Such platforms usually have lighter regulatory and tax requirements than licensed companies and create unfair competition within the market. “If the regulator imposes excessive or disproportionate burdens on authorized operators, then economic incentives will be created both for companies and for consumers to migrate to the informality“, he said.
Licensed operators in Peru pay general business tax along with sector-specific tax that is equal to 12% of the taxable base of gross gaming profit, which creates the burden of 11.76% of GGR for the operators.
“While this rate can be called rather high, it still lies within the framework of what is observed in many international jurisdictions“, he added.
However, Fonseca also noted that Peru later introduced an additional Selective Consumption Tax (ISC) equal to 1% of every bet placed.
Sports Integrity Needs More Cooperation
Next to taxation and competitiveness of the betting market, Fonseca highlighted the importance of sports integrity as another key issue for Peru’s betting sector.
He underlined the importance of the prevention of match-fixing, fraud, and other risks associated with sporting competitions. The bill on strengthening anti-match-fixing regulations and sports integrity was recently adopted by the Congress, but then it was vetoed by the Executive branch and is still awaiting legislative action.
“It is necessary to constantly cooperate with the help of regulators, operators, sports organizations and relevant international organizations“, he emphasized.
The legal specialist also commended Law No. 31557 and its amendments that were a turning point for the legal framework of Peru since they became the first regulation of remote gambling and betting activities in the country.
Tourism Reform May Formalize the Industry
At the same time as the discussion of betting regulations, Peru is also thinking about updating its legislation on tourism in order to further legalize gaming activities.
The proposed Supreme Decree aims to amend the framework of the General Tourism Law (Law No. 32392) in order to include casinos and slot machine operation into the scope of tourism regulated by the Ministry of Foreign Trade and Tourism (MINCETUR).
The amendment does not introduce any expansion of the authorized gaming venues but aims at the formalization of gaming operators into the national register of tourism service providers and better integration of these operators into the policy of tourism development.
According to the official proposal, “currently, the casino and slot machines’ sector is fully legalized with activities being comprehensively supervised using modern technological means such as the Unified Real-Time Control System, allowing MINCETUR and the National Superintendency of Customs and Tax Administration to monitor economic and tax activities of the sector online.” If adopted, the amendment will officially amend Annex I of Law No. 32392.
Source: SBC Noticias
