Peru Not Expecting Huge Gains From Gambling Market as Protests Continue
Posted on: February 1, 2023, 11:49h.
Last updated on: February 1, 2023, 01:15h.
As the political situation in Peru remains somewhat unstable, the country’s gambling industry is going to feel a pinch. The latest data from the Minister of Foreign Trade and Tourism (Mincetur, for its Spanish acronym), Luis Fernando Helguero, indicated this week that gambling activity won’t provide a significant increase in tax revenue in 2023.
This doesn’t mean the market will see a drop, as the collection of taxes in casinos and slot machines will add PEN210 million (US$54.58 million) this year. However, this is only an increase of 5% compared to what Peru registered in 2022.
Speaking at the Foreign Trade and Tourism Commission of Parliament, the minister explained that this collection will still be important. The executive branch and the various municipalities count on the money to help them operate.
Consumer Gambling Holds Steady
Some 30% of the tax revenue is for the provincial municipalities and another 30% goes to the district municipalities. Some 15% is for the public treasury, 15% goes to Mincetur, and the Peruvian Sports Institute receives the remaining 10%.
Based on budget projections, Helguero says this means Mincetur will receive PEN32 million (US$8.31 million) this year. Because Mincetur, through its General Directorate of Casino Games and Slot Machines (DGJCMT, for its Spanish acronym), oversees gambling, part of that money helps regulate the space.
Helguero highlighted that his agency works closely with the Superintendence of Banking, Insurance and AFP, and the Financial Intelligence Unit of Peru. That collaboration aims to uncover possible money laundering and terrorism financing through gambling activity.
As a result, Helguero said the entities will carry out 2,520 technical inspections of gambling halls and 2,880 technical inspections of casinos. There are, respectively, 719 and 19 of each, which means those properties are going to receive a lot of visits.
Last October, the DGJCMT announced that it received ISO 37001 certification for its anti-bribery management system. Through it, the ministry hopes to give officials the tools to prevent bribery, as well as boost its image in the gaming ecosystem.
Peru’s Economy Remains Unstable
The 5% increase is only a projection, and will depend on several factors. The biggest are how the economy progresses, and how quickly the ongoing protests can be resolved.
Bloomberg reported that Peru’s January inflation rate grew to 8.97%, up from 8.46% in December. It’s the highest amount Peru has reported in 25 years, and discretionary spending will drop because of it.
The protests in Peru will cause national production to lose around PEN1.5 billion (US$389.85 million) this month alone, according to calculations by Peru’s largest bank, Banco de Cŕedito. That’s equivalent to 3.4 points of GDP for the same month of 2022, which had 4.5% of annual GDP.
According to calculations by the Ministry of Economy and Finance, as of January 26, the estimated losses due to social conflict amount to around PENS2.4 billion (US$623.76 million), mainly in the southern part of the country.
Peru has been experiencing a socio-political crisis since Dec. 7, 2022. Then-President Pedro Castillo announced the closure of Congress, in addition indicating he wanted to rewrite the Constitution. His efforts only led to his removal from office, with VP Dina Boluarte taking over. This wasn’t received well, and protests have been going on for almost eight weeks now.
The people want new elections. But Congress has repeatedly suspended its sessions over threats of violence. This has only made the situation worse, as more Peruvians join in demanding immediate change.
If the situation doesn’t get any better, gambling will be the last thing on most people’s minds. The good news, for some, is that Peru legalized online gambling last year, which means they can hit the virtual casinos without leaving home.
Related News Articles
Related News Articles
MGM Resorts Overhauls Las Vegas Table Games PolicyJune 2, 2023 — 7 Comments—
Las Vegas Sands Request for Long Island Tax Breaks Draws IreJune 4, 2023 — 6 Comments—
VEGAS MYTHS BUSTED: Tony Hsieh Saved Downtown Las VegasMay 8, 2023 — 4 Comments—
No comments yet