A legislative proposal in Peru seeks to raise the selective consumption tax (ISC) rate on online betting from 1% to 5%. This initiative, introduced by the Civic Works Party, targets only online wagers, leaving land-based gambling unaffected by the tax increase.
The proposed ISC would remain distinct from the existing 12% gaming tax levied on the gross gaming revenue (GGR) of remote gaming and sports betting operators. Importantly, the new rate would apply uniformly to all operators, regardless of their country of incorporation, whether in Peru or abroad.
If passed, the law would take effect the day after being published in El Peruano, the nation’s official daily, with the new rate implemented starting the first day of the following month.
Since launching its regulated online gambling market in February 2024, Peru has seen considerable international interest, attracting licensed operators such as Stake, Rush Street Interactive, and Betsson. However, this optimism has been tempered by the introduction of the 1% ISC on July 1, 2025. Initially, plans to impose a consumption tax were scrapped prior to the market’s debut, but they resurfaced in 2024—a move one legal expert warned could have a “catastrophic” effect on market sustainability.
The rationale behind raising the ISC is twofold: First, the bill cites concerns regarding public health linked to the surge in online gambling, especially youth addiction. Statistics from the Ministry of Health indicated that in 2025, there were 14,409 treatment cases for gambling addiction recorded across national health facilities. The proposal emphasizes that the increased tax could help create a more comprehensive approach to addressing gambling-related issues by increasing the tax burden on the industry. The lawmakers clarified that while they do not see the tax as a panacea for gambling addiction, they view it as a meaningful fiscal instrument within broader preventive measures.
Second, the bill outlines the ISC’s potential to generate revenue, stating it is not intended to ban online betting in Peru but to adjust the tax structure moderately within a regulated market. The legislative text forecasts that the 1% ISC currently yields about S/324 million ($94.1 million) annually, projecting that a jump to 5% could result in S/1.62 billion, though these figures are classified as a "static, illustrative scenario."
Citing other Latin American nations, the bill highlights that numerous countries impose additional taxes alongside standard obligations. For instance, Argentina implements an indirect tax on online betting ranging from 2.5% to 15%, while Colombia has a 16% VAT on GGR for online operators. Comparing these regional practices, the bill argues that a 5% ISC is not extraordinary in this context.
The implications of this proposed increase could impact both operators and bettors, although the precise effects are yet to be determined. The proposal acknowledges that operators might either absorb the tax hike, pass some or all costs to players via altered betting conditions, or share the financial responsibility. In Colombia, some operators have eased the tax’s burden on customers by providing bonuses to counteract the VAT’s impact on bettors.
