Chilean Court Blocks Attempt To Dismiss Investigations Into Online Betting Platforms

August 31, 2023
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A battle to legalise online gambling in Chile continues to be waged in court, with Santiago’s Eighth Court of Appeals rejecting a request to dismiss cases brought against online operators alleging their illegality.

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A battle to legalise online gambling in Chile continues to be waged in court, with Santiago’s Eighth Court of Appeals rejecting a request to dismiss cases brought against online operators alleging their illegality.

The plaintiffs pursuing legal complaints against online betting platforms include state lottery Polla Chilena de Beneficencia, various Chilean casinos and the Chilean tax service (SSI).

The case was kickstarted by self-denunciation from Estelarbet founder Sebastián Salazar Bastías who apparently thought that the court would rule in his favour, and nullify cases brought against offshore sites by deeming online gambling not illegal but instead as an unregulated activity in Chile.

It has, instead, backfired after the appellate court ruled that “the non-existence of a crime cannot be forced" by a court decision. The case can be appealed.

The other battlefront for online gambling regulation in Chile continues its manoeuvres this week, with the Chamber of Deputies' Economy Commission meeting multiple times to discuss various articles of a bill to establish a formal licensing and regulatory framework.

So far, lawmakers have ratified 15 articles of the bill as the commission prepares a final version to present to the full Chamber. These include making the Superintendence of Casinos (SCJ) the licensing authority, a sanctioning system and establishing licensing requirements.

One such requirement includes setting up a closed corporation locally with a share capital of at least 2,000 monthly tax units (approximately US$148,000).

Operators who continue to operate without a licence in Chile will be handed a fine that ranges from 11 to 200 monthly tax units (US$825-15,000) or even a minor prison sentence.

The enforcement mechanism of this measure when most, if not all, unlicensed operators will be based offshore remains unspecified.

Carlos Baeza, a lawyer for operators Coolbet, Latamwin, Betsson and others, told VIXIO GamblingComplaince that the major issue on the docket in the coming weeks is a transitional regime to the new licensing system.

“If this transitional regime is not established, the platforms that are currently operating will have to stop operating for at least one year,” he said.

Baeza said that the issue has already been discussed several times in the Economy Commission, which is confirmed by a matter of public record.

Discussion will continue with haste in the Economy Commission as the bill has been given an urgent indication.

Meanwhile, a separate bill that would outlaw any partnerships between sports teams and online betting platforms has stagnated in the Senate following its approval by the Chamber, much to the chagrin of its champion, Deputy Marco Antonio Sulantay.

He gave an interview last week to Chilean media outlet Bio Bio insisting that the point of the bill was not to outlaw partnerships, although that is what is written in its text.

Sulantay elaborated that instead “it is preferable to regulate them”, citing his motivation as “sports transparency, not the regulation of platforms in general”.

He also said that a complete ban would only encourage the black market, a change of tune from the man who once said that sports-betting advertising “disturbs the very essence of sport which involves team spirit, perseverance and a healthy lifestyle”.

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