Topics About New Peruvian Regulation of Sports Betting and Online Gambling
From the enactment of Law No 31557 (2022), its modification of Law No 31806 (2023), and the recent Supreme Decree No 005-2023-MINCETUR*, the Regulation of Sports Betting and Online Gambling in Peru took place.
*MINCETUR is “Ministerio de Comercio Exterior y Turismo” – “Ministry of Foreign Trade and Tourism”.
The law has defined the General Framework of Requirements and Operations for the activity, and has regulated the intervention of the different operators and global agents in Peru, through the definition of a clear policy, both for fixed or resident establishments, and for online systems.
The new norm, maintaining the coherence and legislative development coming from the Peruvian law of casinos and slots (Law No 27153 of 1999 and Law No 27796 of 2002), has largely translated the legal structure under which the activity of sports betting can be developed in retail locations within the country.
The legislative development has not been surprising, since in the internal debate the standards of social surveillance, tax structure, health, and protection of the population have been maintained, based on the different self-regulations imposed by the sector.
In terms of foreign online gambling operators, the full and guaranteed openness that Peru maintains to international investment has remained within the constitutional framework, which enshrines equal treatment for foreign investment and the financial schemes that make it viable, such as the floating exchange rate and market supply, as well as the freedom of remittances abroad.
International operators will find with this new standard in Peru the legal instrument that will allow them, not only to participate in a well and fully regulated market, but in a market in which they will enter on equal terms for free competition of the different products they offer.
In legislative matters, the law and its regulation already constitute the regulatory legislative body of the activity.
Unlike the law, which is a norm produced by the Legislative Power (Congress), the regulation of the law is a norm produced by the Executive Power and published through a Supreme Decree of the Ministry of Foreign Trade and Tourism.
In Peru, the regulations are executive and expressly determine the detail and development of the basic principles of the law of the sector.
Finally, it is important to note that with the issuance of Laws No 31557 and No 31806 and Supreme Decree No 005-2023-MINCETUR not only the political will of the Peruvian state to consider sports betting and online gambling as activities allowed in the legal system, but also as economic activities subject to regulation, supervision, and control, with respect and openness to foreign investment, is expressed and with full participation of the different operators and investors of the world market.
Stability and facilities for foreign investment in the new Peruvian legal framework
The importance of the future entry into force of the new Law of Sports Betting and Online Gambling (Law No 31557 Amended by Law No 31806) lies in the possibility that every foreign investor has the opportunity that the result of their business can be freely sent abroad thanks to the fact that the Peruvian market has solid economic principles protected and enshrined by the Political Constitution, including:
Foreign investment in Peru: branch or subsidiary?
In Peru, capital companies require a minimum plurality of partners.
In that sense, an option to explore in order to respect the corporate policies of non-domiciled parent companies could be to create a branch in the country of the original company.
This option would allow the non-domiciled parent company to be the sole partner, which would coincide with what many foreign companies are looking for as an option.
Another alternative is known in Peru as the subsidiary which is the corporate form that, complying with the plurality of shareholders, is dominated and controlled by a majority of a parent company, being able, with a minimum percentage, to receive the intervention of another shareholder.
This option is very common, for example, in the world of mining investments in Peru, and by registering as a subsidiary the business is fiscally transparent.
The firm considers it important to suggest maintaining a corporate vehicle that, although it maintains a link with the parent company, does not allow to extend interpretations linked to the different responsibilities, thus avoiding or discouraging any investment initiative in the country.
Regional leadership of Peruvian gaming legislation
After the effective legal and regulatory framework provided by the Gaming Law (Law No 27153 of 1999 – just for casino and slot machines’ retail operations) which is considered an exemplary norm at the international level, Peru has taken a new and positive step in the regulation of its gaming market with the new Law on Sports Betting and Online Gambling (Law No 31557 Amended by Law No 31806) whose regulation has been published by the Ministry of Foreign Trade and Tourism (Supreme Decree No 005-2023-MINCETUR), so that the law enters into force, which positions Peru as one of the leading countries in the regulation of this sector at not only a regional level, but also an international one.
Notes on tax matters for the regulation of the Peruvian Law of Sports Betting and Online Gambling
With the publication of the regulation of the Law of Sports Betting and Online Gambling in Peru by Supreme Decree No 005-2023-MINCETUR, the firm sees that the norm will be to seek to contemplate requirements whose mandatory compliance does not discourage foreign investment through onerous and/or anti-technical requirements that are intended to be imposed within an impractical and less thoughtful legal framework.
For example, the non-domiciled operator shall not be obliged to establish a tax domicile in the country.
The firm’s reflection is generated because the author has recently read in the media the plan of the Brazilian government to “force” foreign sportsbooks to have a “headquarters” in that country.
This has caused motivation to share the author’s opinion in relation to the healthy balance that must exist between the logical collection function of the tax administration versus the necessary facilities for the foreign investor to develop business activity in the country.
That is, the understandable need of the tax administration that the taxpayer has a tax domicile should not collide or oppose the freedom or power that the administered has to plan and design its own corporate policy in the country of destination of its investment, without necessarily having to constitute “headquarters” in the country because the government orders it.
It must be sufficient for the taxpayer to comply with any of the possibilities or alternatives of tax domicile that the national legal system allows for all.
The way to seek effective tax collection is to encourage economic activity with operationally viable regulations and to be intelligently designed and legislated to achieve and access the desired fiscal objective, not establishing obstacles, administrative impediments, or regulatory restrictions that discourage foreign investment.
New Peruvian Law of Sport Betting and Online Gambling (Law No 31557)
Validity of the Law:
Purposes of the Law:
For whom the Law applies:
Competent Regulatory Authority:
Functions of the regulatory entity (MINCETUR):
Authorised to operate sports betting platforms and online games:
Operating licences:
Homologation of betting and gambling platforms:
Operation of retail locations:
Types of bets:
Access to technological platforms:
Guarantees in favour of MINCETUR:
Sports betting advertising:
MINCETUR sanctions for breach of law:
Infractions punishable by MINCETUR:
Betting tax:
Selective Consumption Tax (ISC – Impuesto Selectivo al Consumo):
The regulation of Law No 31557 and its modification Law No 31806
On 13 October 2023, the regulation of the Peruvian Law of Sports Betting and Online Gambling was finally published, approved by Supreme Decree No 005-2023-MINCETUR issued by the regulatory entity, the Ministry of Foreign Trade and Tourism (MINCETUR).
It is a somewhat extensive rule (57 articles and annexes in 92 pages).
With this, we have the end of the vacatio legis of Law No 31557 (modified by Law No 31806) which officially enters into force within 120 days – ie, on 14 February 2024.
Currently, the timeline with the MINCETUR (Peruvian regulatory entity) is as follows.
Jr. Inca Ripac No 364
Jesus Maria
Lima
Peru
+511 592 3945
nsamohod@vidalabogados.com.pe www.vidalabogados.com.pe