A proposed fivefold increase in Peru’s online betting consumption tax could force licensed operators out of the market, industry figures have warned.
Speaking to NEXT.io, Jeremy Castillo Willis, co-founder of Peruvian operators Inkabet and Timberazo, revealed the slated increase in selective consumption tax (ISC) from 1% to 5% could swallow between 50% and 60% of an operator’s gross gaming revenue.
Gaming lawyer Nicolás Samohod, of Samohod Abogados, said his firm had already held “emergency meetings” with operators who had expressed “great concern” over the proposals.
He added that many of these operators were currently reevaluating their continued presence in the country.
The warnings follow the introduction of a bill by Peru’s Civic Works Party parliamentary group that would increase the ISC applied to each online bet to 5%. This would be in addition to the existing 12% gaming tax on GGR.
The proposal, which was introduced earlier this month, cites problem gambling prevention and generating additional government revenue as its objectives.
Tax increase threatens operator profitability
Should the tax be introduced, Castillo Willis warned the consequences would be particularly severe for smaller operators.
“I believe the impact could lead some Tier 2 and Tier 3 operators to reconsider whether to continue operating in the Peruvian market,” he said.
“There may simply not be enough margin left to keep the operation running.”
Peru launched its regulated online gambling market in February 2024, attracting international operators including Betsson, Stake and Rush Street Interactive.
However, the introduction of the existing 1% ISC in July 2025 has already placed pressure on licensed businesses, according to Castillo Willis, with several having since closed or suspended operations.
He said the operators that remain had generally eaten the cost of the tax themselves, rather than pass it onto customers. This has undermined the intended effect of the tax, in his view, which was to discourage gambling.
Castillo Willis said he had also seen a change in the types of promotions offered in the country. As the ISC applies to all bets, including promotional bets, bonuses with rollover requirements have been swapped out for free bets.
Should the ISC rate increase to 5%, Castillo Willis said businesses would be forced to confront increasingly difficult choices over odds, promotions and acquisition spending.
“If the economic value of a player decreases, campaigns that were previously profitable may no longer be viable,” he said.
“Companies considering entering Peru would probably think twice before making that investment.”
Tax increase could lead to black market growth
Both Castillo Willis and Samohod also raised concerns that the potential tax hike could ultimately strengthen Peru’s offshore market.
Castillo Willis pointed to continuing demand for unauthorised offshore operators, despite enforcement action by gambling regulator MINCETUR.
Earlier this month, the regulator blocked 50 unauthorised websites and 27 illegal physical establishments, he said.
Samohod warned that departures by licensed operators could create opportunities for illegal businesses, threatening both employment and consumer protections.
The congressional revenue expectations for the proposal have also attracted criticism.
The bill estimates that increasing the ISC to 5% could raise annual receipts from PEN 324 million (€84 million) to PEN 1.62 billion (€420 million).
Castillo Willis questioned those projections, noting that they do not take into account operators leaving the market or players moving offshore. He also highlighted the absence of a concrete plan to use the additional revenue to fund gambling addiction prevention or treatment.
“If the goal is to reduce problem gambling, we need to measure whether that’s actually happening, not just how much tax is being collected,” he said.
Constitutional challenges could follow
The proposal could face legal resistance if approved by lawmakers. Samohod outlined two potential routes for challenging the measure.
These could take the form of a Lawsuit of Unconstitutionality, which would invalidate the legislation entirely, or an injunction that could be applied to a single operator.
Castillo Willis noted that legal proceedings challenging the existing 1% ISC had already been brought by both operators and industry associations.
However, he called for dialogue between Congress, the Ministry of Economy and Finance, MINCETUR, tax authority SUNAT, and industry representatives before proceeding with further legal challenges.
For the time being, the fivefold increase remains a proposal rather than law.
With that in mind, Castillo Willis suggested lawmakers should first assess the impact of the original July 2025 tax.
“Shouldn’t we first see what results the current 1% ISC has produced before increasing it to 5%?” he said.
NEXT.io, in partnership with platform technology leader Sportingtech, published some essential research on the Peruvian market at the beginning of 2026 with the NEXT iGaming Market in Focus: Peru report.
Dingnews.com 16/10/2026