Peru bans sports betting and games with Bitcoin

The new rule also reaches companies in that niche that are related to crypto assets in Peru. The regulation will begin to take effect in practice as of February 2024. Subsection 'e', of article 39 of the law, resolves that “carrying out transactions using cryptocurrencies” is prohibited. The norm sees the light in the prelude to a legislative debate that aims to lead to the regulation of the activity.

What the law says that prohibits paying sports bets with Bitcoin in Peru
The recently approved text, whose application will begin on February 9, 2024, raises the request for authorization to work. The period will run the following 30 days from the entry into force of the rule, between February 10 and March 10, 2024.
During this period, all technological platform operating companies that offer these services must virtually present their request to the Ministry of Foreign Trade and Tourism of Peru (Mincetur) to be granted operating authorization. Those who do not comply with the procedure will be unable to continue operating.

But in the case of the use of cryptocurrencies, the new law leaves no room for doubt:

“The Owner, without prejudice to the provisions of the Law, is prohibited from carrying out transactions using cryptocurrencies.”
The law contemplates economic sanctions that could exceed 190 thousand dollars for those who fail to comply with the provisions.
The Minister of Foreign Trade and Tourism of Peru, Juan Carlos Mathews, said:
“The rule will allow the Peruvian State to collect close to S/ 162 million annually, to be invested in the reactivation of tourism, tourist infrastructure works, promoting sports and addressing mental health programs. Furthermore, we make it clear that it will not affect betting and prize payment. The money won as a prize will be collected in full. The tax will apply to national and foreign online gaming and betting companies.”
The official considered joining other jurisdictions where the activity is also regulated:
“It is the first time that this important economic activity has been regulated in the country. In South America, Peru becomes the third country to regulate it, after Colombia and Argentina (in the provinces of Buenos Aires, Córdoba and Mendoza).”
Online gaming is not new and its expansion in Latin America and the world is increasing. In that sense, Mincetur delivered the following numbers:

• There are 50 online sports betting and gaming technological platforms operating in Peru, as of October 2023.
• Global online gaming gross revenue in 2022 reached $102 billion, according to an international study by H2 Gambling Capital.
• It is estimated that the volume of bets made in Peru during 2022 was close to S/3,800 million.

What cryptocurrency regulation project does Peru currently have?
As is happening in other latitudes, Peru is on the verge of a legislative debate that could lead to a regulatory framework for the cryptocurrency industry. The bill, which has passed the review process of the Economy Commission and is ready to be voted on in the plenary session of Parliament, proposes the creation of a framework law that regulates marketing.

Given this, the Fintech Association of Peru has raised its voice of alarm. Regulatory bodies such as the Superintendency of Banking and Insurance and the Central Reserve Bank of Peru (BCRP) also joined. Together with the Ministry of Economy and Finance (MEF), they have expressed their disagreement with the proposed regulation in a letter sent to legislators.

What they specifically ask for is an exhaustive review of the proposal, to ensure that it is a fair, equitable and effective text for the development of the industry in that country. The Blockchain Association of Peru has joined this complex panorama. From that space they argue that the law has been developed without taking into account the local cryptocurrency industry.

The Bitcoin regulation scenario in Peru has good intentions, but it is not enough
During May 2022, a delegation of 21 Peruvian businessmen arrived in El Salvador seeking investment opportunities in the field of Bitcoin and blockchain technology. The mission, organized by the Embassy of El Salvador in Lima, was part of the Economic Diplomacy strategy of the Central American country.

Peruvian entrepreneurs expressed their interest in understanding the implementation of Bitcoin in El Salvador and analyzing the investment opportunities that the country offers.

However, and with the elements available up to now, the Peruvian example could represent what prevails in other countries. Projects without consultation, with resolutions emanating from actors who do not understand how cryptocurrencies work or have no experience in the matter. The result ends up being a marked disagreement from almost everyone and a debate that ends up bogged down in complaints. For now, Peru is on this difficult path that aims to lead to a law that, at least, does not displease everyone.