It has been estimated that slot machines in Peru make between US$8 and US$12 each day and that there are presently 56,935 machines operating in the country. This means that US$600,000 or more revenue is being generated every day. Mincetur, the Ministry of Commerce and Tourism that authorises and regulates gaming, says that 96% of venues are operating outside the gaming law with either the legal protection of habeas corpus (625 venues) or illegally (317 venues).

According to the tax authority La Sunat, of those operators with licences or under court protection only 42% comply with tax law and pay their dues. Ten companies, which administer a total of 147 venues, neither declare nor pay tax because they have obtained court judgements in their favour. Incredibly, it would seem that thirteen years after Peru introduced a modern and workable gaming law that encouraged foreign investment, things have gone rapidly downhill ever since.

The major problem has been haphazard alterations and additions to the original law. This, under the Peruvian constitution, has allowed companies to seek and gain protection from the new laws through the courts. Even the law just passed by Congress that from this week will sanction illegal gaming operators with between one and four years imprisonment is being questioned. Lawyers are saying it transgresses judicial norms that state a person cannot be sanctioned twice for the same act, and illegal operations are already sanctioned by closure and forfeiture of equipment.

There is still a long way to go before Peru abandons its piecemeal attempts to bring law to its gaming industry. Political expediency, lawyers with wealthy clients and, in some cases, a lack of industry knowledge have so far kept a workable and enforceable gaming law from becoming a reality. Until the country finds the political will to force through compliance with an uncompromising gaming law, and one that cannot be changed by opportunism, Peru will continue to lose millions of tax dollars that could be used to benefit local communities and reduce the gap between the very rich and the very poor. (E-08.01.06)

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