Peru: President legalizes online sports betting and casinos

Peru is taking a big step. The South American country has officially legalized online sports betting and online casino games. Peruvian President Pedro Castillo was referring to a decision by Congress, which would have already voted clearly in favor of legalization last month. 91 deputies voted for the legalization at that time, there was not one dissenting vote. Subsequently the new legal regulation was signed thereupon and published also already in the Peruvian newspaper El Peruano. This is comparable to the German Federal Gazette, in which laws are published before they come into force. In the case of Peru, this now happens within 60 days.

Hand in hand with the legalization of online gambling goes the appointment of a responsible ministry. In the future, this will be the Ministry of Foreign Trade and Tourism (Mincetur). The new law authorizes this ministry to monitor all gambling activities within the country.

Gambling law in Peru: severe penalties for violations

In addition to monitoring providers and issuing licenses, the ministry’s responsibilities include blocking URLs and IP addresses that violate the new gambling law. In addition, the authority must verify that the software and hardware of the gambling providers is suitable for proper gambling.

Operators will have to adjust to further framework conditions. For example, the tax rate for online offerings has been set at twelve percent of the monthly tax base. This means twelve percent levies on the difference between net revenues minus maintenance costs. However, it is not the Mincetur that is responsible for compliance with the tax guidelines, but the “Sunat” – i.e. the customs and tax authority. The latter also monitors the payment of the so-called maintenance tax, which requires a further two percent of the operator’s income. If they violate the law, they face severe penalties. In addition to simple fines, the list of penalties also includes the freezing of assets or the withdrawal of the license for up to ten years.

Is Uruguay following Peru’s example?

In another South American country, too, there are growing indications that online gambling will be legal in the future. Just a few days ago, the Senate in Uruguay passed a bill on legalization, thus also taking a big step towards opening up the market. The bill had previously taken a declaration in the parliamentary session, was subsequently confirmed by the Uruguayan Senate Chamber and is now before the country’s House of Representatives for further consideration. Experts assume that this review is now a mere “formality.” It therefore seems unrealistic that the House of Representatives will lodge an objection.

Should the law also clear this last hurdle, the regulation of online gambling would in future fall into the hands of the Directorate General for Casinos. This in turn is part of the country’s Ministry of Economy and Finance. According to the draft, one of the measures to be introduced is a nationwide register listing all online gaming providers.

Player protection as an important issue in Uruguay

The authorities in Uruguay attach great importance to the area of player protection. Thus, there are plans to set up a special fund in which at least five percent of the gross revenues of all online providers are to be collected. The fund is intended to prevent the possible damage caused by online gambling and, if the case arises, to enable the financing of therapies. However, the five percent of gross revenue is not guaranteed for the companies. According to the draft, these can also be up to eight percent.

Licensed operators will have to follow some strict guidelines as part of the new legislation. If they fail to do so, they also face stiff penalties. These range from a simple warning to a fine of several thousand US dollars. At the same time, the authorities can also revoke or suspend a company’s license. Unlike in Peru, however, the law in Uruguay comes into force much more quickly, provided all hurdles are cleared. And it does so immediately on the day after approval by the Uruguayan executive.

Peru the more interesting market?

For international gambling companies, the waves of legalization in both countries naturally result in some clear advantages. However, it is not yet known which companies will actually seek a license in either nation. Many observers assume that most gambling companies are primarily interested in the market in Peru. With more than 32 million inhabitants, the country offers a population almost ten times as large as Uruguay – and thus also tends to have a noticeably larger target group.