(short): Ley 16. 697 and amendments (Uruguay)

Basic laws: Ley N ° 16. 697 (1995) and subsequent amendments (Uruguay)

1) What is Ley N ° 16. 697 and why it matters to the gambling industry

Ley N° 16. 697 (April 25, 1995) - a major fiscal package on the "new tax regime and competitiveness," which, among other things, secured the VAT regime for the lottery/rates segment. The original text (Título 10 - IVA) separately stipulates "games of excitement based on tickets/forms," exempt from VAT, except for 5 de Oro and 5 de Oro Junior; the taxable base (rate price) is determined for them.

Almost this was read as a general exemption of "paper" games from VAT, with exceptions for 5 de Oro/Junior. Profile media have been referring to Ley 16 for many years. 697 as the source of this benefit.

Key norm Ley 16. 697 (fragment)

«M) Los juegos de azar… asentados en billetes, boletos y demás documentos relativos a juegos y apuestas, con excepción del “5 de Oro” y del “5 de Oro Junior”. En el caso de éstos últimos juegos, el monto imponible estará constituido por el precio de la apuesta.»

2) First adjustments: 1996-1998

After 1995, budget and tax clarifications followed, where rates and calculation techniques in related sections (IRP, contributions, etc.) ruled. For example, parliamentary materials fix the replacement of Art. 23 Ley 16. 697 with rate calibration and effective date 1 January 1998; in IMPO summaries there are cross-references (including Ley 16. 904/1997). These amendments did not cancel the special VAT clause about "games on the ticket," but tightened the general fiscal contour.

3) 2017: new architecture for betting and online

In 2017, the country launched a course towards digital discipline:

Ley N° 19. 535, Art. 244: directly confirmed the principle of illegality of remote online games/bets, with the exception of certain state powers and permits already issued.
Decree 366/017: prohibition of advertising/sponsorship of unlicensed online and tools to block access/payment flows.
Ley N° 19. 535, Art. 257-261: created Impuesto a las Apuestas - a special tax on bets through electronic slot machines/" automatic "bets; in December 2017, the primary regulation was issued (Decree 359/017).

💡 Important: this is a new layer on top of the previous 1995 VAT logic. The IVA mode for "games on a ticket" was still read by Ley 16. 697, and in 2017 a special tax on electronic bets was added.

4) 2025: unification and 0.75% rate on "Impuesto a las Apuestas"

In 2025, the government rebuilt the regulation "Impuesto a las Apuestas" in one text - Decree N ° 167/025 (August 12, 2025). The document stipulated that the tax is levied on each rate (regardless of the form - cash, chips, electronic funds), the rate is 0.75% of the rate amount; the operator is designated as the responsible holdover and transfers the amount to the DGI. The decree replaced 359/017.

From official and profile publications: 0.75% rate and monthly liquidation confirmed by MEF/Presidency and industry reviews.

5) How all the pieces stack up for the market

VAT (IVA) and "paper" games (1995): basic benefit for lotteries/bets on the form, the exception is 5 de Oro/Junior (for them the base is the bet price). This is a "historical" framework that explains why the lottery segment has long been out of VAT.

Fiscal adjustments 1996-1998: adjusted rates and administration in related taxes, without breaking the logic of paragraphs "M)" about games.

Anti-online (2017): principled prohibitive norm for remote online + ad ban; in parallel - a new special tax for electronic bets in the halls. This recorded an "offline yes/online no" before the new policy.

Clarification 2025: consolidation of special tax rules and a rate of 0.75% for each rate is important for the economy of halls and budget revenues.

6) Practical conclusions for operators and the state

Operators of the offline sector (halls/casinos) are required to integrate a 0.75% deduction from each bet and transparent reporting in the DGI (monthly liquidation).

The lottery-betting circuit continues to rely on the historical VAT logic of Ley 16. 697; exceptions (5 de Oro/Junior) require correct VAT accounting.

The policy against illegal online (2017 +) remains in force: exploitation and advertising of an unlicensed remote product is prohibited; blocking measures are in place.

Time line of norms

1995 — Ley N° 16. 697: fixes VAT mode; p. "M) ": exemption of "games on the ticket," the exception is 5 de Oro/Junior (tax base - bet price).

1996-1998 - budget/tax amendments: adjustments to rates and administration, including replacement of Art. 23; introduction of a number of norms from 01. 01. 1998.

2017 — Ley N° 19. 535:

Art. 244 - prohibition of remote online games/bets; Decree 366/017 - prohibition of advertising and blocking measures.
Art. 257-261 - creation of Impuesto a las Apuestas; Decree 359/017 - primary regulation.
2025 - Decree 167/025: consolidation of norms for "Impuesto a las Apuestas," rate 0.75% and administration through DGI.

For Uruguay's gambling industry, Ley 16. 697 (1995) is the foundation of the VAT regime for lotteries/rates on a ticket with point exceptions, to which a more stringent digital policy (2017) and a special tax on electronic rates were later "fastened." And Decree 167/025 (2025) brought the regulation of the special tax to a single standard (0.75% from each rate). Together, this explains why "paper" games are traditionally out of VAT, and electronic bets are subject to a separate fee, and why online remote remains prohibited without special permission.