The CEO of Apuesta Total, Gonzalo Pérez, has voiced strong concerns over Peru’s upcoming Selective Consumption Tax (ISC) on online gambling, calling it a “very complicated situation” for operators. Scheduled to take effect on January 1, 2025, the ISC and other regulations are causing alarm within the gaming industry, particularly regarding the feasibility of implementation and financial sustainability.
The tax system includes a 12% tax on net gaming revenue (GGR) and an additional 1% ISC on every bet placed. While Pérez noted that the 12% GGR tax is manageable, the ISC introduces significant hurdles that could disrupt operations.
Technical and Operational Challenges Ahead
One of the core issues, according to Pérez, lies in how the ISC will be applied in real time. To meet the requirements, platforms will need to calculate and deduct 1% of each bet at the moment the transaction occurs. This seemingly simple adjustment, however, demands deep technical changes to the platforms—an undertaking Pérez said could take at least eight months.
“The platform needs to deduct ISC alongside the actual bet value. If someone bets PEN 100, the wallet must reflect PEN 101 before accepting the bet. That split—between the bet and the tax—requires substantial modifications,” Pérez explained.
He stressed that these modifications must pass certification from international laboratories and obtain approval from Peru’s Ministry of Foreign Trade and Tourism (Mincetur). Without these approvals, operating the platform would be non-compliant, putting operators at risk of hefty fines or losing their licenses altogether.
“It’s an impossible timeline. If we rush to make these changes and operate uncertified platforms, we’ll face severe sanctions. If we don’t, we’ll fail to comply with tax rules. Either way, the State is putting us in a lose-lose scenario,” Pérez added.
Financial Risks and Potential Confiscatory Effects
Pérez also highlighted the financial implications of the new taxes. A 1% ISC per bet may seem modest at first glance, but the reality paints a different picture when combined with the 12% tax on net gaming revenue.
He illustrated the risk with simple figures:
- If operators take a PEN 100 bet, the 1% ISC immediately deducts PEN 1.
- That PEN 1 tax equates to 20% of the operator’s Gross Gaming Revenue (GGR), which is typically 5% of the total bet.
- Adding the existing 12% GGR tax to this equation brings the effective tax burden to 32%.
For operators, such figures are unsustainable. Pérez cited a Constitutional Court ruling (Sentence 009-2001) that deemed a 20% rate confiscatory, warning that the ISC risks crossing this threshold.
“This setup could destroy the sector. Taxing at this level is not only unsustainable for legal operators but also counterproductive. It opens the door for illegal gambling to thrive, where there are no taxes and no regulations.”
A Tipping Point for Legal Operators?
Pérez’s remarks underline growing frustration among legal online gambling operators in Peru. As the legal industry grapples with compliance challenges, Pérez fears that the ISC will drive players and operators towards unregulated platforms, undermining the State’s objectives of increased tax revenue.
The ISC’s structure places Peru’s legal gambling sector in a precarious position:
- Operators must either absorb the tax, slashing already thin margins, or transfer it to players, risking customer dissatisfaction.
- Illegal gambling, with no taxes or operational restrictions, becomes increasingly attractive to both players and rogue operators.
“It’s regrettable,” Pérez said, “because instead of strengthening the legal industry, these measures threaten its existence. We’ll lose players to illegal platforms, and the State will end up collecting less than they expected.”
The State Versus the State
What frustrates Pérez—and likely other industry leaders—is the lack of coordination between regulators and tax authorities. On one hand, operators must meet strict regulatory requirements, which include certified platforms and transparent compliance. On the other, the tax collection framework demands immediate changes that cannot be realistically implemented within the given timeline.
“The State is putting us against itself,” Pérez lamented. “There’s no way to comply with both sides of the law by January 1.”
This regulatory and technical conflict is raising alarms across Peru’s online gambling landscape. Pérez’s concerns serve as a stark warning: if the ISC is enforced as planned, the country risks driving away legitimate operators and losing ground to illegal gambling networks.
A Risky Path Forward
As January 2025 approaches, the industry’s options remain limited. Without intervention or an extension, Peru’s online gambling operators face significant financial and operational risks. Pérez’s statements reflect a broader sentiment within the industry—one of frustration, uncertainty, and scepticism over the practicality of these taxes.
For now, the ball is in the government’s court. Whether they choose to revise the ISC’s implementation or proceed as planned could determine the future of Peru’s legal online gambling sector.
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