Peru's legislative agenda has taken a sharper turn toward online gambling taxation. A new bill, tabled by the parliamentary group of the Civic Works Party, proposes hiking the selective consumption tax (ISC) on digital wagers from the current 1% to 5% of each bet. It's one of the most significant tax adjustments since the market's launch last February.

Targeting online only

The proposal leaves land-based operators completely alone, applying the higher rate exclusively to online betting. Importantly, the new ISC would sit alongside Peru's existing 12% gaming tax on gross gaming revenue. Remote operators could face a combined tax burden of up to 17%, depending on how their operations are structured.

The tax would apply uniformly regardless of operator domicile, whether incorporated locally or internationally. If passed, it enters force the day following publication in El Peruano and applies from the first day of the following calendar month.

Financial and public health rationale

The bill has two legs to stand on. On the public health front, Peru's Ministry of Health reported 14,409 treatment cases for gambling addiction at health facilities in 2025. That's the figure legislators cite as evidence for strengthening prevention and care infrastructure. Rather than a prohibition mechanism, the ISC increase gets framed as a complementary prevention tool. The idea is that stronger taxation supports broader regulatory oversight without eliminating the market itself.

The financial case is equally compelling. Current projections suggest the existing 1% ISC generates approximately S/324 million ($94.1 million) annually. At 5%, that figure could balloon to S/1.62 billion, though the bill acknowledges these are illustrative calculations under static conditions. The legislators argue the rate is reasonable by regional standards. Argentina imposes 2.5-15% indirect tax on online betting, while Colombia sits at 16% VAT on operator GGR.

Market implications

The proposal arrives at a delicate moment for Peru's nascent digital gambling sector. Since launch, the market has attracted major international players including Stake, Rush Street Interactive, and Betsson. But enthusiasm has cooled somewhat since the 1% ISC commenced on 1 July 2025. That tax had originally been scrapped before market opening, only to resurface in 2024. Industry commentary at the time warned of "catastrophic" consequences for viability.

The bill acknowledges operators face three cost-absorption options: absorb the tax internally, pass it to players through adjusted betting terms, or share the burden. Colombia's operators have shown some mitigation is possible. Player bonus credits can offset tax impact, suggesting the outcome may not be uniformly negative across the market.