Peru’s Gaming Industry Contributes Over 120 Million Soles to Tourism Development

Peru’s gaming industry now becomes a major source of funding for the tourism sector as the industry has already managed to raise more than 120 million soles in investments in development and marketing initiatives, President of the National Society of Games of Chance (SONAJA), Fernando Calderón Castro claims.

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These funds were collected from taxes levied upon land-based casinos and slot machines, as well as online gaming platforms. Some part of the revenues goes to Mincetur to assist in promoting tourism activities, developing infrastructure, and regulating the industry, Calderón Castro clarified during his conversation with Turiweb.

Impactful Financial Contributions despite Structural Changes in the Industry

Tax collection from all the gaming operations amounted to 465 million soles last year, thus proving that the sector keeps growing in importance for the Peruvian economy. However, this expansion is not equally beneficial to land-based gaming subsector which has been contracting ever since and now includes fewer venues as well as generates fewer incomes due to declining number of customers.

This situation is related to the current trend of increasing preferences for digital platforms over the ones which operate physically.

Different Structure of Allocation Depending on the Type of Gaming

Distribution of tax income from gaming activities depends on whether the game takes place via land-based casinos or online. In case of physical venues the structure is the following:

• 60% – provincial and district municipalities hosting gaming companies
• 15% – Mincetur
• 10% – Peruvian Institute of Sport (IPD)
• 15% – Public Treasury

At the same time, allocation of the incomes obtained from online activities looks different as follows:

• 40% – Mincetur
• 20% – mental health programs
• 20% – IPD
• 20% – Public Treasury

Thus, we may see that different proportions of revenues go to various destinations depending on the type of gaming operation.

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Industry Complaints about “Overregulation” and Excessive Taxation

Though the gaming industry proves to be rather effective, some problems still remain unresolved, among which lies the problem of excessive regulation which leads to additional tax burden for operators. Calderón Castro criticizes levying of the Selective Consumption Tax (ISC) on land-based gaming enterprises since another type of levy called gaming tax already exists.

“The application of the tax makes little sense, they are poorly designed and what they will generate is to kill the industry, its revenues, and job positions. The countries that have overregulated this activity through taxation have reduced their revenues from gaming, but what has increased is illegal gambling“, he said.

According to the gaming industry representatives, imposition of new levies on their operations does not stop people from gambling but drives them towards using unregulated platforms. As a result, state revenues suffer as do plans for legalization of the segment.

Significant Role in Touristic Infrastructure

Gaming operations continue to play a prominent role in Peru’s tourism industry despite the discussed issues. According to Calderón Castro, gaming venues contribute to development of entertainment tourism in such cities as Tacna, where the availability of gambling draws many foreigners into the country.

This factor increases tourism potential and stimulates expenditures in other segments such as accommodation, dining, etc.

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Source: SBC Noticias