Peruvian Betting Operators Challenge Constitutionality of Selective Consumption Tax

The online gambling and betting industry in Peru plans to contest the constitutionality of the Selective Consumption Tax (ISC) of the country following the certification by the National Jury of Elections (JNE) of the validity of the 5,000 signatures needed to lodge a constitutional action before the Constitutional Court.

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The challenge concerns the ISC imposed by Legislative Decree No. 1644, signed by President Dina Boluarte. As per several constitutional and tax law experts, the tax might not satisfy all the legal requirements, making it potentially unconstitutional.

Tax Obligation Increases Worries in the Regulated Market

Licensed online betting firms in Peru must pay 12% Gaming Tax and 1% ISC on each bet. It is estimated that, based on the tax structure, the actual tax obligation may exceed 50% of the Gross Gaming Revenue (GGR), depending on the conditions in which the taxed companies operate.

According to official industry figures, the effects are already noticeable. Over the period between 2025 and 2026, there have been 40 licensed betting firms that left the Peruvian market, while some 1,500 retail betting shops were closed down. The decline is also visible in sports sponsorships; from sponsorship of 18 professional football teams in 2024, only 5 are currently being sponsored in 2026.

Excessive Taxation Favors Illegal Gambling Platforms

The representatives of the industry emphasize that with the imposition of such a tax obligation, the tendency of players to use illegal offshore platforms is growing. Such platforms are less regulated, are not obligated to pay the same amount of tax, and thus may give competitive odds and payouts.

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Lawmakers are expected to examine potential amendments to Legislative Decree No. 1644 in order to increase legal certainty while preserving the income received from the tax and fighting illegal gambling at the same time. The process of the examination will happen in the Peruvian Congress, where legislators will have the possibility to shape the future of the betting taxation regulation framework of the country.

Constitutional Court Precedent May Influence the Outcome of the Case

In addition to that, some legal experts have drawn attention to the precedent case concerning the taxation in the gaming industry of Peru. Constitutional Court Case No. 009-2001-AI/TC declared some of the tax provisions for casinos and slot machine operators to be unconstitutional.

As a result of this decision, there were changes made to the tax obligations, and compensation was provided to those who paid under the invalid regime. Legal specialists think that the precedent case can prove itself important if the Constitutional Court decides to accept the new challenge to the ISC.

The result of the constitutional action and the debate in Congress will influence the future of the regulated betting market of Peru.

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Source: SBC Noticias