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Chile's Lottery Monopoly Files Criminal Complaint Against Online Operators

March 2, 2023
Legal battles between online operators and incumbent Chilean gambling interests continue to be waged in the court, with state lottery monopoly Polla Chilena de Beneficencia filing a criminal complaint last week against five leading online brands.

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Legal battles between online operators and incumbent Chilean gambling interests continue to be waged in the court, with state lottery monopoly Polla Chilena de Beneficencia filing a criminal complaint last week against five leading online brands.

It marks the latest in a year’s worth of legal chess moves to force regulation on Chile’s online grey market.

The complaint was filed in the Eighth District Court of Santiago against Betsson, Betano, Betway, Coolbet and Latamwin at the same time that the Casino Gaming Superintendence (SCJ) sent letters to four local television outlets ordering them to stop airing ads from online gaming companies during their broadcasts.

Carlos Baeza, a Chilean gaming lawyer for Coolbet, Latamwin and Betsson, among others, sounded exasperated by the arduous legal back and forth. He told VIXIO GamblingCompliance that the criminal complaint filed by Polla Chilena is no different than others filed in the past, including last year by casino operator Dreams.

“It's exactly the same — there is no new argument — it was presented last year by Dreams and it is what the Superintendent has been saying for the last two or three years,” Baeza said.

Baeza was not concerned about the case actually succeeding, as he said that online gambling is not included in the section of the Criminal Code that the complaint was filed under, but that anyone has the right to present a complaint.

“There’s not really a serious intention to be successful in this criminal case. This is good for them for the news. The arena in which this battle is going on right now is the media and not the criminal system.”

It is not the only battle that Chilean-facing online operators are fighting right now.

On January 25, the Chilean tax authority was removed from the list of digital value added tax (VAT) systems accessible to all online gaming platforms, which were blocked from paying digital VAT.

Last June, the tax authority published a list of companies, including online gaming platforms, that did not pay digital VAT. At the time, the authority said it was working to make sure everyone who owed tax would be paying.

Hernan Frigolett, the head of the tax authority, told Diario Financiero: “Our service has developed coordinated work with banks and other payment card issuing entities, in order to obtain information to determine if the registered platforms are declaring and paying the tax; or identify the platforms that do not declare or pay digital VAT, and must do so.”

Baeza is frustrated by the contradiction and alleges an ulterior motive.

“It's absolutely difficult to understand why they made that decision. And the only reason for that is to try to keep us away from the arguments that we are using in terms of we are paying taxes, because even when we were at the Economic Commission in the Chambers of Deputies last January, we said that we are paying taxes.”

A third arena for online gambling operators remains Chile's Congress, where two bills to establish a licensing system and another to ban advertising and sponsorship by betting companies remain pending before different committees in the Chamber of Deputies.

Online operators have meetings scheduled this month to discuss the VAT issue, while Congress will also reconvene to debate the online gambling bill.

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