Online gambling and betting estimated to generate approx. US$1.2B p.a. without yielding any revenue to the national treasury
Roberto Helbert Sánchez Palomino, Minister of Foreign Trade and Tourism (MINCETUR for its Spanish acronym) announced that in an extraordinary session, the Council of Ministers approved the draft bill to regulate online gambling and sports betting.
Peru at last takes an important step to regulate the online gambling and betting activity, (that has been generating approximately US$1.2 billion per annum without yielding any revenue to the national treasury), and promoting legislation prepared by MINCETUR.
Minister Sánchez pointed out that it is urgent that these (online) operations be controlled in a comprehensive manner, paying taxes and complying with adequate conditions, similar to Colombia, Mexico, Argentina, and most of the United States and Europe.
Minister Sanchez said: “The Council of Ministers was in favour of Mincetur’s proposal because it establishes a legal framework that will safeguard transparency in gambling and the integrity of sport, the promotion of responsible gambling, the establishment of access controls to protect vulnerable sectors and prevent the laundering of money, assets and financing of terrorism, amongst others”.
The head of the Mincetur indicated that from the proceeds of tax on online gambling, around S/.160 million per year (Peruvian Soles) can be invested in the reactivation of tourism, in addition to public infrastructure works, and also promoting sports. “The government of President Pedro Castillo is clear that this activity must be regulated efficiently for the benefit of all Peruvians,” he added.
About the Draft Law
The draft bill, in its present form, reaffirms that MINCETUR is the entity responsible for granting authorizations for the use of technological platforms for online gambling and sports betting, including licensing physical premises, so that companies must also be registered in the Single Registry of Taxpayers. Additionally, operators must have a legal representative in Peru and a peruvian web domain (ending in “.pe”).
The white paper also states that control of technological platforms will be carried out by physical and/or logical access, face-to-face or remotely. The proposal also prohibits the participation in remote sports games and bets of minors and people with gambling problems.
At the same time, companies that do not count with the appropriate authorization will be prohibited from signing advertising or sponsorship contracts. On the matter of administrative sanctions, these include, official reprimand, fines (from 1 to 500 UIT), suspension of activities, cancellation of authorization and/or administrative registration, disqualification for up to 10 (ten) years and permanent disqualification.
The MINCETUR white paper proposes a direct tax applied to Net Income (Net Win). Likewise, distribution percentages, as well as the beneficiaries of the tax, are established on the basis of administrative competence and their link with the activity subject to regulation.
In this sense, the legislative proposal also establishes that from 100% online gambling and sports betting tax revenue, 40% will go to the public treasury, 20% to the Peruvian Institute of Sport (IPD), and 40% to Mincetur for internal distribution, as follows: 25% supervision and control the activity and 75% to the promotion and development of tourism.
It is important to mention that the online gambling bill proposal presented to the Council of Ministers indicates that after being approved, Mincetur must issue regulations for the Law within a period not exceeding 60 working days. Also, that from the date legislation coming into effect, companies must comply with the provisions of the law within a period of one hundred and twenty (120) calendar days.
The draft legislation approved by the Council of Ministers, will be sent to Peruvian Congress for discussion and analysis in the respective commissions as soon as possible.
