The saying that in Peru certain laws are made to favour certain interests has obviously remained unchallenged under the nefarious rule of Alejandro Toledo. That is to say that the corruption he swore to fight against when a presidential candidate has found its way into bureaucracy, politics and the very halls of government. The new law concerning the operation of slot machine gaming halls came into force on 1 January 2006 and its intention is to close down as much as 80% of the ‘tragamonedas’ business in the country, without concern for jobs or investment.

Over the course of the last 15 years, gaming law in Peru has been chopped and changed by bureaucrats and politicians of all colours to serve their own ends. There has never been a business or development plan other than that issued in 1992 to promote investment and employment in a country destroyed by terrorism and the disastrous economic policies of the 1980s. Since then the lack of knowledge of the officials and the influence of powerful groups have converted the gaming laws and regulations in Peru into playthings to be manipulated, where the technical aspects protecting both society and investors have been put aside.

Law No. 27796, which modifies articles of the Law No. 27153 regulating the exploitation of casino games and slot machines, is a reasonable law if only it had been there first. After five years of fiddling with the gaming laws, during a political era that some declare corrupt, Law No. 27153 was enacted on 9 July 1999. The law is clear, correcting earlier mistakes that clouded the initial regulations and promising stability to the gaming industry within the context of a liberal economy; and the development of gaming in Peru began at national level.

Companies that were founded under earlier legislation have retreated behind legal means under Peruvian Constitutional laws to protect rights that have been transgressed by later laws. Using Habeas Corpus judicial resolutions, these astute businessmen now operate slot machines without concern for whatever new laws are enacted and, for the most part, without paying any gaming tax. Not only this, but some firms under HC judicial protection now enter partnerships with other businessmen to open more gaming rooms under the same scheme.

The changes to the Peruvian gaming laws not only have not produced the desired restrictions but also have created confusion and disadvantage within the industry. The new law enacted on New Year’s Eve comes with something of a gift from Santa Claus in the way of recourse to judicial protection, just as has been seen before. Meanwhile, the Gaming Authority (DJCMT) has no power to act or collect taxes from companies under the HC umbrella, which may or may not be depositing gaming taxes due into private bank accounts. (E-01.06.05)

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