Regulated
Peru has enacted legislation to regulate Remote/Online Gaming and online Sports betting by publishing Law no. 31,557 in the Government Gazette on the 13^th of August 2022. The relevant law is titled ‘Law Regulating Remote Gaming and Remote Sports Betting’, it was subject to a reform by the Law no. 31806 from 8th June 2023 and finally implemented by the Supreme Decree No 005-2023 from 13^th October 2023, issued by the Peruvian Ministry of Foreign Trade and Tourism (MINCETUR) (the “Supreme Decree”).

A licensing regime has been enacted and will enter into force 120 days after the publication of the Supreme Decree in the official gazette -10^th February 2024-. This will inevitably bring the current offshore market to an end, creating robust local industry standards.

The Peruvian regulatory framework distinguishes between Remote Sports Betting and Remote Gaming, as the two authorised verticals and each will require its own licence.

Remote Sports Betting consists of a remote game, wherein the result of a sporting event or any other fact or circumstance that may occur in said sporting event is wagered. Only those sporting events that are part of a national or international association, sports federation or league duly accredited and authorised in the country of origin are enabled for betting. Electronic sports (e-sports), fantasy sports and virtual sports are considered part of Sports betting.

The remote games vertical includes games of chance that may include components of skill or dexterity, which involve placing bets other than remote sports betting.

The Supreme Decree has included under the category of remote games multiple-bet games, line games, Card Games, Poker Games, Blackjack, Roulette, Dice, Simulation of Sports or racing games, Balls/number extraction games, Keno or bingo games, Immediate Prize Games and Live Games.

The main elements of the Remote games and remote sports betting legislation include the introduction of:

• A competent supervisory authority. The Peruvian Ministry of Foreign Trade and Tourism (MINCETUR) is the Government Body legally empowered to regulate and supervise the remote gaming industry through the General Directorate of Casino Games and Slot Machines (DGJMT)
• A new licensing regime for the operation of technological platforms for remote gaming and remote sports betting open for legal entities incorporated in Peru, as well as any Branches opened in Peru of legal entities incorporated abroad, and legal entities incorporated abroad
  • Operators may use domains with the extensions “.bet.pe”, “.bet”, “.com”, “.pe” or “.com.pe”
  • Licences for remote gaming and sports betting to be granted separately, for a period of six years with the possibility of renewal
  • A fixed gaming tax of 12% of the operator’s monthly net income less the maintenance expenses of the technological platform of remote games, or remote sports betting, equivalent to two percent (2%) of the monthly net income
  • A guarantee of circa EUR 720,000 per license must be made in favour of the regulator
  • Player funds must be kept in a local bank account
• An authorisation and registration procedure for technological platforms, games, progressive systems and other main components or services of technological platforms
• Technical requirements for the for technological platforms, games, progressive systems and other main components or services of technological platforms
• Responsible gaming measures
• Industry specific AML principles and regulations for the protection of minors
• Advertising and sponsorship restricted to authorised technological platforms
• Authorisation of ‘remote sports betting halls’ which are localised retail points, within which players access a remote operator’s products and can also make payments
• Authorisation of certification laboratories
• Blocking actions of unauthorised Websites, IP addresses, URLs and means of payment
• Currencies different than the national currency (Soles) can be offered by Operators (US Dollars or another currency). However, the use of cryptocurrencies is expressly prohibited by the new law

A transitory regime has been established for those legal entities who prove that were operating platforms in the country prior to the enactment of the law. Such entities will be able to apply for a conditional authorisation within a period of thirty (30) calendar days as of the date of the Law no. 31,55’s effective date (10^th February 2024). This conditional authorisation will grant operators a maximum term of ninety (90) calendar days to comply with technical requirements of the new regulatory framework (platform certification, registration and authorisation)

Market Size
The regulated market is yet to commence; however, the unregulated (offshore) market is estimated to have a turnover of around EUR 1.1B.

Fixed odds betting makes up circa 75% of the market.

We expect a major part of the offshore market to terminate in the coming months due to the introduction of sector specific legislation calling for the blocking of unlicensed sites.

Competitive Landscape
We estimate around sixteen major operators in the market that conduct branding and advertising, have local partners, sponsor football teams, and have alliances with retail shops for payments. These will be expected to be licensed in the coming months and offshore operators will be sanctioned and geo-blocked.

Localisation
Sports betting is the primary product offering in Peru as is the case for all LATAM, however online casino games including slots, tables as well as virtual bingo are also made available by operators in the offshore market.

An operator’s servers may be located either in Peru or abroad.

Peru’s financial institutions are viewed as stable with a BBB+ rating from Fitch in 2021. The Peruvian Sol is also one of the stronger currencies in Latin America, having less volatility against the US Dollar in the past five years.

Having a local retail network is suggested to optimise distribution and payments, since cash is still more popular than digital modes of payment in the territory.

Some general demographics from 2023 include:

• Estimated Population: 34.17M
• Political System: Regional Democracy, Peru is divided into 25 Regions
• Average Age: 31
• Population over 18: 71% circa 23.5M
• Internet Penetration (January 203) 71.1%
• Social Media Users: 25.5M
• Active Mobile Connections: 40.03M
• Web Traffic Originating from Android Devices: 90.36%
• Web Traffic Originating from IOS: 9%
• Active Bank Accounts: 56.3%
• Active Credit Cards: 12.9%
• Mobile Money Accounts: 14.3%
• 75% of all E-commerce is generated in Lima
• Online Transactions (online bill payments or using internet generally for payments): 7%
• Low Fixed Broadband Penetration with a preference for mobile. Desktop broadband considered expensive.

Top Key Attractions and Challenges
Attractions

• Open style licensing regime as opposed to a monopoly/tender process
• Moderate advertising standards and regulations
• Foreign entities may apply for an authorisation and registration as operators or service providers, without the need of incorporating a local entity or having a local branch or subsidiary
• Ability to on-board foreign players.( ID document: National ID document (DNI), in the case of Peruvian citizens, Immigration Card, in the case of foreign citizens residing in Peru or Passport for foreigners not residing in Peru)
• Newly regulated territory within LATAM, paving the way for a larger regulated LATAM strategy for operators
• Presence of major operators within the market, generating stable revenues
• A previously tolerated grey market has created an appetite for the remote gambling product, with an industry on the ground that is well positioned

Challenges

• Brand new regulatory regime which is yet to be tested
• Requirement for a performance bond payment equivalent to Euro 720,000 (exchange rates Jan 2024)
• Retail presence is required due to a preference for cash amongst players
• Labs must be authorised within the country to certify software targeting this market
• Software providers must hold an authorisation and be registered with the regulator
• Identity verification of customers must be done at the time of registration
• Platforms must have a self-diagnosis method that verifies periodically and authenticates all critical components that may affect game operations

We consider the market to be an open one given the previous tolerance of offshore operators with a local presence and the introduction of sector specific legislation which seeks to create a balance between oversight, player protection and operators’ business needs.