A new legislative proposal in Peru aims to raise the rate of the selective consumption tax (ISC) on online wagers to 5%. Presented by the Civic Works Party, the bill seeks to increase the ISC from its current rate of 1% specifically for online bets, exempting land-based gambling operations from this increase.
The proposed tax would operate independently of the existing 12% gaming tax imposed on the gross gaming revenue of remote gaming and sports betting businesses. Importantly, the 5% ISC would apply uniformly, irrespective of whether the gambling operators are based in Peru or elsewhere.
If approved, the law would take effect the day after its publication in El Peruano, the official state newspaper, with the new rate commencing on the first day of the subsequent calendar month.
This move comes as Peru's regulated online gambling sector, launched in February 2024, continues to attract international attention, with notable companies like Stake, Rush Street Interactive, and Betsson obtaining licenses to operate in the country. However, enthusiasm for the market has been somewhat tempered by the recent enforcement of the 1% ISC since July 1, 2025. Although the initial plan to implement a consumption tax was abandoned before the market opened, it was revisited in 2024. Legal experts have expressed concerns, stating that the proposed hike could be devastating for the market's sustainability.
The push for increasing the ISC to 5% is aimed at addressing two main issues: the rising prevalence of online betting and its associated public health implications, particularly concerning gambling addiction among youth. According to the Ministry of Health, 14,409 treatment cases for gambling addiction were recorded in health facilities throughout Peru in 2025, underscoring the urgency for enhanced prevention and treatment strategies.
The bill articulates a dual purpose for the tax increase: to contribute to comprehensive policies aimed at preventing problem gambling and to enhance governmental revenue, although it clarifies that the intent is not to discourage online betting in Peru. Instead, it aims for a moderate tax increase as part of a broader regulatory framework.
Financial projections accompanying the bill suggest that raising the ISC to 5% could yield approximately S/1.62 billion ($475 million) annually, a significant uptick from the S/324 million ($94.1 million) currently generated at the 1% rate. However, these projections are described as a static, illustrative scenario rather than definitive figures.
The rationale also draws parallels with other Latin American jurisdictions that implement similar additional taxation measures. For instance, Argentina charges online gaming operators additional taxes ranging from 2.5% to 15%, while Colombia imposes a 16% VAT on gross gaming revenue for online facilities. In this context, the proposed ISC increase is framed as not being excessively burdensome compared to regional norms.
The increase in tax could influence both operators and bettors, though the specific effects remain uncertain. The bill acknowledges that operators might either absorb the increased tax, pass on all or part of the additional costs to consumers through changes in betting conditions, or adopt a mixed approach. There are examples from Colombia where some operators have offered bonuses to players as a means to counterbalance the financial impact of new taxes.
