A new legislative proposal in Peru is seeking to increase the selective consumption tax (ISC) to 5% applied to each wager placed online. Introduced by the Civic Works Party, this bill represents a substantial hike from the current ISC rate of 1% specifically for online betting, while land-based gambling would not be affected by this increase.
The ISC would be distinct from the existing 12% gaming tax imposed on the gross gaming revenue (GGR) of online and sports betting operators. Importantly, the proposed 5% rate would apply uniformly, regardless of whether the operators are based in Peru or overseas. If passed, the new law would take effect the day after it is published in El Peruano, the country's official newspaper, with the new rate beginning the first day of the following month.
Despite a promising start when Peru launched its regulated online gambling sector in February 2024, attracting international operators like Stake, Rush Street Interactive, and Betsson, the market faced new challenges with the introduction of the 1% ISC on July 1, 2025. Although the original plan to implement a consumption tax was shelved before the market opened, it was revived in 2024. Legal experts have warned that this could gravely impact the market's sustainability.
The push to raise the ISC is motivated by concerns for public health stemming from the increase in online betting and its association with gambling addiction, especially among youth. In fact, the Ministry of Health noted 14,409 admissions for gambling addiction treatment in 2025, underscoring the urgency for enhanced prevention and treatment initiatives. "This measure aims to complement broader strategies for preventing gambling problems by increasing the specific tax burden associated with it," the bill indicates, stressing that it is not intended as a standalone solution to addiction.
The current 1% ISC generates around S/324 million ($94.1 million) annually, and an increase to 5% could potentially elevate this figure to S/1.62 billion. However, the authors of the bill caution that these numbers are merely theoretical projections.
The proposal also points to practices in other Latin American countries that levy similar taxes alongside standard obligations. For instance, Argentina's operators face an indirect tax ranging from 2.5% to 15% for online betting, and Colombia applies a 16% VAT on online gaming GGR. In this context, the 5% ISC increase is positioned as a reasonable adjustment within regional standards.
Impacts of this tax hike may ripple through both operators and bettors. The bill acknowledges that operators might absorb the tax increase themselves, pass the costs onto bettors through altered conditions, or share this burden. In Colombia, some operators have alleviated tax impacts for players by providing bonuses to counterbalance VAT costs.
