Overhauling Peru’s remote gaming law: Addressing criticisms and closing loopholes
Peru’s Congress has successfully passed a set of amendments to rectify loopholes and errors present in the original 2022 gaming law designed to regulate remote gaming and sports betting within the country.
Peru’s Congress revises gaming law for clarity and fairness
The initial law, known as Law 31.557, was hastily approved and enacted in August 2022, but it immediately faced criticism from industry stakeholders who referred to it as a “Frankenstein” piece of legislation, as it appeared to be a patchwork of provisions borrowed from different pre-existing bills.
During a plenary assembly held on the night of May 25, Peru’s Congress gave the green light to Bill no. 3595/2022 in order to address the shortcomings of the law. Lawmakers aimed to clarify certain concepts and define their scope through this draft.
One notable amendment pertains to Article 40 of the original law, which had inadvertently created a loophole that could be interpreted as granting foreign-based companies the ability to obtain licences without being subject to the 11.76 percent revenue tax. The revised legislation now ensures that both foreign and Peruvian companies are obligated to pay this tax.
Moreover, several changes have been introduced, including an increase in the financial guarantee required for approved operators. Previously set at 200 Peruvian tax units (UITs), equivalent to approximately US$270,000, the guarantee has been raised to either 600 UITs or 3 percent of the operator’s annual gross revenue, whichever is higher.
Additionally, the amended law allows foreign residents and tourists to register and engage in gaming activities with Peruvian operators while in the country. The original law restricted registration to Peruvian nationals, despite allowing foreign players to participate in land-based casinos.
Furthermore, licensed online gambling operators will now have an expanded list of permitted domains, including dot.com, dot.com.pe, dot.pe, dot.bet, and dot.bet.pe. This amendment rectifies the previous restriction that only permitted the use of the domain dot.bet.pe, which opponents successfully argued would impose unnecessary migration costs on operators.
The Congress of Peru is housed in the Legislative Palace, situated in Lima, Peru’s capital.
An amendment to Peru’s penal code
In a significant development, the forthcoming legislation to regulate online gambling in Peru will bring about corresponding changes to the Peruvian Penal Code. This means that once the regulations are implemented, operating as an online operator without a licence could potentially constitute a criminal offence.
The amendment to the Penal Code can be observed in Article 243-C, which stipulates penalties ranging from one to four years of imprisonment.
Carlos Fonseca Sarmiento, a prominent gaming lawyer from Peru, expressed his concerns about the 120-day period that elapses between the publication of the regulatory decree for online gambling and the actual enforcement of the law.
Writing for Yogonet, a Spanish-language media outlet, Sarmiento noted that despite the extension of the transition period from the current 60 days to 120 days, he remains apprehensive. He believes that this duration may not provide adequate time for operators currently operating in the grey market to undergo a legal transition or for Peru’s Ministry of Foreign Trade and Tourism to manage the anticipated surge in licensing applications.
The next crucial step for the online gambling law is for President Dina Boluarte to officially promulgate the legislation within 15 days, thereby setting the amendments into legal motion. This action will mark a significant milestone in the ongoing process of regulating online gambling in Peru.
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