A variety of gambling activities is permitted in Peru, including horse racing, cockfighting, lotteries, and casinos – the last becoming legal only in 1992. At that time the country of nearly 25 million persons was in the midst of a violent struggle with revolutionary guerrillas. The economy was on the edge of collapse with unmanageable inflation. Things turned around in the past decade. What was once a hostile atmosphere for casino operations is now a strong market in a stable political and economic situation under the leadership of former president Alberto Fujimori.
The Peru casino law requires that full casinos must be located in one of ten tourist zones. They receive ten-year renewable licenses, and they pay taxes of 20% on their gross gaming wins.
The capital city of Lima has about 80% of the casino action in the country. The city has eight full casinos, and another forty are located around the country. Most of them are privately owned, although the government owns some. There are also separate slot machine parlors. In all there are over 5,500 total machines in Lima, including a Megabucks system linking 300 machines and offering prizes in excess of $100,000.
Whereas an overall political and economic stability helps the gaming industry in general, continuing disputes over whether the national or the local law applies to the slot machine parlors has caused much confusion. In 1996 the national government set forth new rules that resulted in the closings of over half of the slot parlors. The rules required casinos to have at least 120 machines each and to guarantee 85 percent payouts; they were not allowed to have machines over five years old. Many parlors could not comply and closed. Others went to court and got injunctions against enforcement of the new national rules. They continue to operate while others seek to follow the rules, and the market continues to be in disarray.
Growth of the Peruvian casino industry is unlikely, as the markets are near saturation at the moment. It is estimated that over 90 percent of the play comes from local residents and not from tourists, a situation that does not allow for casinos to contribute to the economic development of a country.
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