A proposed bill in Peru aims to raise the selective consumption tax (ISC) on online betting from 1% to 5% for each wager placed. This initiative, put forth by the Civic Works Party, would solely affect online gambling activities, leaving land-based casinos and other forms of gambling unscathed by this tax increase.
The ISC is distinct from the existing 12% gaming tax levied on the gross gaming revenue (GGR) of online gaming and sports betting operators. Notably, the new tax rate would apply uniformly, irrespective of whether the gambling operator is based in Peru or internationally. If enacted, the law will take effect the day following its publication in El Peruano, the official state newspaper. The 5% ISC would then commence from the start of the subsequent calendar month.
The introduction of the ISC occurred alongside the launch of Peru's regulated online gambling sector in February 2024, attracting considerable interest from international operators, including Stake, Rush Street Interactive, and Betsson. While the market's launch was deemed largely successful, the introduction of the 1% ISC effective from July 1, 2025, has tempered optimism. Originally, the idea of implementing a consumption tax was set aside before the market opened, but it resurfaced in 2024, prompting concerns about its long-term viability.
The reasons behind proposing a tax increase revolve around two key themes: rising gambling addiction rates and generating revenue. The bill emphasizes the growing challenge of digital betting and its effects on public health, particularly regarding the youth of Peru. Citing a report from the Ministry of Health, the legislation indicates that there were 14,409 recorded cases of gambling addiction treatment in health facilities nationwide in 2025, underscoring the urgency for enhanced preventive measures.
The bill states, "The measure can contribute to a comprehensive policy for preventing problem gambling by increasing the specific tax burden on the activity." It clarifies that increasing the ISC is not a standalone solution to gambling addiction but part of a more extensive framework that includes prevention, regulation, and oversight.
Furthermore, the ISC is viewed as a revenue-generating mechanism, although the bill stresses that the goal is not to hinder online gambling in Peru but to thoughtfully raise the tax burden. Projections suggest that increasing the ISC to 5% could yield significant revenue. At its current 1% rate, the ISC generates about S/324 million (approximately $94.1 million) annually. If the proposed rate is implemented, this figure could rise to S/1.62 billion, although the bill notes these estimates are hypothetical.
The legislation also compares Peru's taxation framework to that of other Latin American markets. For instance, online betting operators in Argentina face additional indirect taxes between 2.5% and 15%, while Colombia imposes a 16% VAT on online gambling GGR. Thus, the proposed 5% USC increase is positioned as a relatively standard rate regionally.
This tax increase proposal could impact both operators and players. The bill allows for various responses from operators: they may choose to absorb the increased costs, pass them on to bettors by altering betting conditions, or strike a balance between both. Some operators in Colombia have managed to alleviate these tax burdens by offering bonuses to players, offsetting the potential financial strain on bettors.
