Peru’s Successful Reduction in Illegal Gambling Despite Concerns

The Ministry of Foreign Trade and Tourism (Mincetur) of Peru has reported a significant decline in the prevalence of illegal gambling in the country, citing a 40% reduction in the supply of illegal gambling services on digital platforms. This announcement follows over a year of enforcement since the implementation of Law No 31557, which regulates online sports betting and gaming in Peru.

Mincetur, which governs the gambling sector in the country, updated the public on its progress last Friday, marking more than 12 months since the law was enacted. The law has facilitated the entry of international gambling operators such as Stake, Rush Street Interactive, and Betsson into the Peruvian market. Since its enactment, the Ministry has authorized 60 technology platforms and registered 280 service providers in the gambling sector.

In addition to licensing new platforms, Mincetur has made strides in combating illegal gambling. The Ministry claims that, through the efforts of the General Directorate of Casino Games and Slot Machines (DGJCMT), it has removed 15% of illegal gambling sites and reduced the overall supply of black-market gambling by 40%. The regulatory body has intensified its oversight, closed illegal establishments, and coordinated actions to limit the presence of illicit gambling platforms. Efforts to combat illegal gambling have also included contacting payment institutions to block transactions to and from unlicensed gambling operators in the country.

Key Takeaways

• Peru's Ministry of Foreign Trade and Tourism (Mincetur) reports a 40% reduction in illegal online gambling since the introduction of Law No 31557, aimed at regulating digital sports betting and gaming.

• The country has attracted international gambling operators, with 60 technology platforms authorized and 683 new sports betting venues registered since the law's enactment.

• Concerns are rising within the industry over the impact of increased taxes, with experts warning that higher consumption taxes could drive operators and players back to the black market.

Positioning Peru as a Regional Leader

The regulatory framework established by Law No 31557 has positioned Peru as one of the leading jurisdictions for online betting in Latin America, with the country becoming only the third in the region—after Colombia and Argentina—to implement clear online betting regulations. Mincetur touts its role as a regional benchmark for gambling regulation, pointing to the law’s success in formalizing the digital gambling sector, creating a safer environment for operators and users, and fostering new investment opportunities. The Ministry also highlights the regulation’s role in boosting the digitalization of the entertainment sector and strengthening tax collection.

According to Mincetur, the regulatory changes have resulted in a surge in legal sports betting venues, with 683 new establishments added to the national count since December, bringing the total to 4,516. Additionally, the Ministry has focused on promoting responsible gambling through educational campaigns in schools and providing training to betting companies. Mincetur also collaborates with gaming associations to ensure a safe and responsible gambling environment.

The Impact of Increased Tax Burdens

Despite these advancements, the Peruvian gambling sector faces new challenges. One major concern is the reintroduction of a consumption tax on gambling transactions, which will increase from 0.3% to 1% starting July 1, 2025. While industry observers expect Peru to become the third-largest online betting market in Latin America, the rising tax burden has sparked fears among operators.

Gonzalo Perez, CEO of Apuesta Total, one of Peru’s leading betting companies, has voiced concerns that the increased consumption tax—on top of the existing 12% Gross Gaming Revenue (GGR) tax—could have a detrimental impact on the industry. He argues that the combination of these taxes could drive both players and operators back to the black market, undermining the gains made through regulation.

Legal experts share similar concerns. Nicolás Samohod Rivarola, head of gambling and betting at the Vidal Caceres law firm, warns that the tax burden on licensed operators could become “unconstitutional” due to its potentially excessive nature. He notes that this might force many stakeholders to reconsider their continued operations in the Peruvian market.

This regulation has allowed the digital sector to be formalised, fostering an environment of trust for both operators and users. It has also opened up new investment opportunities, boosting the digitalisation of entertainment and strengthening the country’s tax collection.

Conclusion

While Mincetur’s regulatory efforts have successfully reduced illegal gambling and bolstered the formal gambling sector in Peru, the looming increase in taxes casts a shadow over the industry’s future growth. As Peru continues to carve out a role as a regional leader in gambling regulation, the impact of the upcoming tax changes could play a critical role in shaping the country’s online betting market in the coming years. The gambling industry will be closely watching how these policies evolve and whether they will maintain the momentum towards a regulated and sustainable market.