The man, 19, said he had been separated from friends earlier in the night.
He then alleges he was raped by two men after being kicked out of a brothel on the resort's Punta Ballena strip.
The man had earlier entered the brothel after meeting two prostitutes but was thrown out as he had no money, reports Ultima Hora.
It is then claimed the two men were waiting for him on the streets before the alleged attack.
According to reports, doctors have confirmed the man was the victim of a sex attack.
However, sources say the man has spoken to police but has declined to press charges.
The Civil Guard has not responded to a request for comment.
In May a British man told police he had been raped in the Ibizan party resort of San Antonio.
The 27-year-old tourist told officers his sex attacker forced himself on him near the raucous West End area before stealing his phone.
Local press described the suspect as a "large black man".
Island paper Diario de Ibiza said it had happened near a KFC take-away in the West End after the British man was thrown to the ground in a surprise attack.
Magaluf is one of the most notorious holiday destinations for British holiday-makers.
Scores of Brits, typically aged 18-25, head to Magaluf in the summer for its cheap booze and nightlife.
Additional reporting Natalia Penza
