Peru Proposes Fivefold Tax Hike on Online Gambling: Market Impact and Regional Context
Peru Proposes Fivefold Tax Hike on Online Gambling: Market Impact and Regional Context
Overview of the Proposed ISC Tax Increase
Peru’s parliamentary group from the Civic Works Party has introduced a bill seeking to raise the selective consumption tax (ISC) on online gambling wagers from 1% to 5%, while exempting land-based gambling from the increase. This tax would be charged in addition to the existing 12% gross gaming revenue (GGR) tax that licensed remote operators already pay.
Key details:
- Implementation timeline: Comes into effect the day after publication in El Peruano (official gazette), applying from the first day of the next calendar month
- Scope: Applies uniformly to all operators, whether licensed in Peru or internationally
- Context: Follows Peru’s February 2024 market launch, which initially scrapped the ISC before reintroducing it at 1% in July 2025
Motives Behind the Tax Proposal
The justification for this sharp increase rests on two pillars:
1. Public Health and Problem Gambling Mitigation
The bill emphasizes rising digital betting addiction, particularly among youth, citing 14,409 recorded cases of gambling addiction treatment in 2025. It positions the tax as:
- A “complementary prevention tool” within broader regulatory measures
- A financial disincentive, though not a standalone solution, for high-risk gambling behaviors
“The measure can contribute to a comprehensive policy for preventing problem gambling by increasing the specific tax burden on the activity.” - Bill text
2. Revenue Generation for Public Programs
While stressing it doesn’t aim to ban online betting, the proposal estimates potential revenue:
- Current 1% ISC: S/324 million/year (~$94.1M)
- Projected 5% ISC: S/1.62 billion/year
(Note: These figures are labeled “illustrative” and may fluctuate based on market response.)
Regional Comparisons and Precedents
The bill defends the 5% rate as regionally moderate, citing other Latin American markets:
| Country | Additional Tax on Online Gambling |
|---|---|
| Argentina | 2.5%-15% indirect tax per province |
| Colombia | 16% VAT on GGR |
| Peru (current) | 1% ISC + 12% GGR tax |
The document argues this aligns with LatAm fiscal trends, where multiple layers of gambling taxation are common.
Potential Market Reactions and Operator Strategies
The bill acknowledges three possible outcomes for the tax burden distribution:
- Full operator absorption: Operators absorb costs, reducing profit margins
- Partial or full pass-through: Bettors face higher odds margins or fees
- Hybrid approach: Revenue sharing (e.g., Colombia’s VAT-offsetting bonuses)
Industry concerns: A local lawyer warned iGB the hike could be “catastrophic” for market viability, potentially discouraging operators like Betsson, Stake, and Rush Street Interactive—all recent entrants—from sustaining Peru-focused operations.
What Comes Next?
- Legislative process: The bill must pass congressional debate; no timeline specified
- Operator contingencies: Market may see pricing adjustments or reduced marketing if enacted
- Long-term effects: Could influence neighboring countries’ tax policies for digital gambling
This proposal signals Peru’s evolving stance on balancing gambling revenue with social costs, mirroring global regulatory tensions in newly regulated markets.
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