Peru's Civic Works Party has introduced a new bill proposing a substantial increase in the selective consumption tax (ISC) on online betting, raising it to 5% from the current 1%. This increase is exclusive to online wagers, meaning land-based gambling will not be subject to this tax hike. Notably, the ISC will continue to operate separately from the existing 12% gaming tax applicable to gross gaming revenue (GGR) from remote gaming and sports betting operators.
The new tax rate would apply uniformly to all operators, regardless of whether they are based in Peru or operate from abroad. If passed, the law would take effect the day after its official publication in El Peruano, the national newspaper, with the 5% rate coming into play from the first day of the subsequent calendar month.
This shift in taxation comes in the context of Peru launching its regulated online gambling market in February 2024, generating significant interest from international players, including Stake, Rush Street Interactive, and Betsson. Despite this initial success, the sector's optimism has waned due to the implementation of the 1% ISC that began on July 1, 2025, a measure introduced after an earlier consumption tax proposal was abandoned prior to the market's launch. One legal expert has cautioned that the intended hike could be “catastrophic” for the market.
The motivation for elevating the ISC is twofold. Firstly, the bill underscores concerns about gambling addiction, particularly among the youth, as digital betting continues to rise. In 2025, the Ministry of Health reported that 14,409 gambling addiction cases were treated in health facilities across Peru. The bill posits that increased taxation can enhance prevention, detection, and treatment efforts for gambling-related issues.
Moreover, the proposal clarifies that the increased ISC aims to generate revenue, not to ban online betting in the country. “It seeks to moderately raise the tax burden within a regulated market,” it reads. “This measure is conceived as a complementary prevention tool rather than a sole response to problem gambling.”
Financial forecasts included in the bill reveal that the ISC, currently generating around S/324 million (approximately $94.1 million) annually at the 1% rate, could yield up to S/1.62 billion if raised to 5%. However, these projections are characterized as a “static, illustrative scenario.”
Other regional examples are cited to provide context, highlighting that various Latin American jurisdictions impose additional taxes on online betting beyond primary tax obligations. For instance, operators in Argentina face indirect taxes ranging from 2.5% to 15%, and in Colombia, a 16% VAT on GGR for online operators is effective.
The bill notes that the proposed ISC increase could affect both operators and bettors, although the exact impacts remain uncertain. It acknowledges that operators might handle higher tax liabilities through absorption of costs, adjustments to betting conditions that can shift expenses onto bettors, or by balancing the tax burden between both parties. Some Colombian operators, for example, have mitigated VAT impacts by offering bonuses to players.
