Peru's Sports Betting and iGaming Regulations Unveiled: Insights from Elizabeth Saiz Flores of Llona & Bustamante Abogados

In an exclusive article for Gambling.Re, Elizabeth Saiz Flores, Associate at Llona & Bustamante Abogados, delves into the groundbreaking amendments brought by the new Peruvian legislation

Peru has officially approved its sports betting and igaming regulations, making it the third South American country, after Colombia and Argentina, to regulate this industry, with steep fines and a strict compliance schedule set in motion.

In an exclusive article for Gambling.Re, Elizabeth Saiz Flores, Associate at Llona & Bustamante Abogados uncovered the significant insights about the groundbreaking amendments introduced by the new Peruvian legislation and the emerging legal trends that operators should be aware of.

When asked about the significant amendments introduced by Law No 31,806 and their implications for operators, especially in relation to tax responsibilities and market entry, Mrs. Flores overviewed that Law No 31557 and its amendments introduced by Law N° 31806, as well as its associated regulations, approved by Supreme Decree N° 005-2023-MINCETUR (Ministry of Foreign Commerce and Tourism), have brought about a comprehensive regulatory framework for the exploitation of remote games and remote sports wagering technological platforms, as well as the operation of remote sports wagering halls. These regulations apply to both national and foreign entities, including branches.

Here are the essential responsibilities operators should adhere to, as outlined by Mrs. Flores:

a.         Obtain MINCETUR´s authorization and grant a warranty prior to start operations. The unauthorized exploitation of remote games and remote sport wagering can not only be imposed with administrative sanctions (fines from the amount equivalent to 150 UIT and to 200 UIT), but can also be punished with imprisonment of not less than one nor more than four years, with a fine of 365 days and disqualification to exercise said activity provided that is was included as a crime;

b.         Comply with several communications and reporting of audits to MINCETUR;

c.         Obtain MINCETUR´s authorization and registration (homologation) of remote games and remote sports wagering technological platforms, game programs, progressive systems, and main components and or services as well as to obtain of a compliance certificate issued by an authorized certified laboratory. This certificate will stipulate the compliance of the approved applicable technical standards;

d.         Execute the exploitation of the technological platform using the domain “bet.pe”, “.bet”, “.com”, “.pe” or “.com.pe”;

e.         Guarantee that only natural persons of legal age, of Peruvian or foreign nationality, are previously registered on the duly authorized technological platforms to make a bet;

f.          Contract only with duly authorized and registered certified laboratories and suppliers of related services;

g.         Assume obligations regarding information security and personal data protection as well as to conduct its business under transparency (give access to MINCETUR, SUNAT and UIF) and comply with SPLAFT regulations;

h.         Dissemination of a unauthorized technological platforms advertisement is prohibited. Only authorizes operators may sponsor companies and individuals, events or activities of any kind as long as the sponsorship complies with current Peruvian legislation.

Mrs. Flores underscored that players must pay for the bets with currency, credit cards, debit cards or any other means of payment, with the exception of cryptocurrencies. Additionally, only sporting events that are part of national or international associations, federations or sports leagues can be subject to sports betting.

With respect to market entry, as provided by Law 31557, foreign entities are able to request MINCETUR´s authorization in order to exploit remote games and remote sport wagering technological platforms, as long as its business is conducted in compliance with the applicable legislation and the approved technical standards. For said purpose, MINCETUR shall qualify economic and financial solvency regarding the solicitant, its partners, directors, officers, and representatives. In that sense, all entities without distinction (national or foreign), must adapt its business to the new legislation on this matter.

Regarding taxation,  Mrs. Flores added that the tax on remote games and remote sports wagering was created, with the following characteristics: (i) monthly frequency, (ii) levies with a tax rate equivalent to 12% after deducting 2% of the MNI and (iii) collected by SUNAT.

Looking to the future, Mrs. Flores acknowledges that when an economic activity begins to be regulated, the legal/regulatory tendency is to become more severe as new risks related to said economic activity arise. In this particular industry, we can foresee risks associated with digital aspects (noncompliance with information security measures and technical standards), sports frauds and infringement of unfair competition law (sport players collude to get an illicit benefit based on their performance in the sport event), and infringement of personal data protection law and consumer protection Law. The above mentioned means that operators shall (eventually) bear higher costs and be subjected to expensive fines among other administrative and criminal sanctions.

Regarding taxation, although the Law N° 31557 has made amendments in order to include the exploitation of remote games and remote sport wagering technological platforms as an economic activity levied with the Selective Consumption Tax (SCT), the applicable tax rate was omitted. Therefore, the Law establishing the applicable tax rate of SCT must be published until the Law N° 31557 enters into force; otherwise, the SCT could not be applicable.