Chile's Online Gambling Bill Better Late Than Never

March 8, 2022
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Chile’s outgoing government has introduced a long-awaited bill to regulate online casino games and sports betting.

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Chile’s outgoing government has introduced a long-awaited bill to regulate online casino games and sports betting.

Comprehensive legislation for online gambling was filed in Chile’s Chamber of Deputies on Monday (March 7), more than a year after the Ministry of Finance first announced it was drafting a bill and five days before a new president and new Congress will be sworn into office in Santiago.

The legislation introduced on Monday borrows from the regulatory regimes of Colombia and Spain and would allow for an unlimited number of licences to be granted by Chile’s national casino gaming authority, which would be renamed to reflect an expanded remit.

Under current law, the only forms of legal online gambling in Chile are limited lottery games and sports betting offered by two national lotteries.

However, the country is home to a growing offshore market that officials estimate to be worth around US$130m to US$170m in annual revenue and which they expect to double in size under a licensing system.

“With this bill we will impose clear rules on an industry that is not regulated in Chile,” Alejandro Weber, Chile’s undersecretary of finance, told the country’s La Tercera newspaper prior to the measure’s introduction.

“In this way, we will protect users and regulate the operators who will now have to pay a specific tax that will generate revenue for the treasury of around US$55m annually once in effect.”

Similar to Spain, Chile would establish a licensing window and require operators to submit applications for general licences within a specific period of 60 days to be set by the regulator. No further licences could then be awarded for two years after that initial period, “in order to give time for the consolidation of the development of the industry.”

Licensees would be subject to an annual fee of approximately US$70,000 and be taxed at a headline rate of 20 percent of gross online gambling revenue, plus an additional 2 percent to be paid to Chilean sports and a mandatory 1 percent return to approved responsible gaming initiatives. Players would also have to pay a monthly 15 percent winnings tax.

If the bill is passed into law, the renamed Superintendence for Casinos, Betting and Games of Chance would have a period of 180 days to adopt full implementing regulations.

The regulator would be able to enforce the law by seeking court orders to block unlicensed websites as well as related financial transactions, while only licensed operators would be able to advertise or sponsor sporting events in Chile.

In the absence of a clear law on online gambling, several leading international operators including Betsson and Betway have recently reached partnership agreements with leading football teams or Chile’s football association.

Speaking to La Tercera, Weber described the legislation as “a good bill which we hope will move quickly and be approved as soon as possible".

Unless the bill can be fast-tracked through Congress within just a few days, however, it seems destined to be a starting point for future conversation for lawmakers and government officials under the new administration of President-elect Gabriel Boric.

After his election victory in December, the 36-year-old federal deputy and former student leader will take office as Chile’s president on Friday, in a significant political shift from the current centre-right government of billionaire Sebastián Piñera.

It is not known where Boric stands on gambling matters.

Also uncertain is how exactly the outgoing government’s online gambling bill will be received by a Chilean land-based casino industry that is increasingly consolidating around a handful of large operators, led by the soon-to-merge pair of Enjoy and Dreams.

Chilean casinos are understood to be supportive of regulating online gambling in general but industry representatives have not directly commented on the scope of bill as introduced on Monday.

A representative of the Chilean Casino Gaming Association this weekend accused offshore operators of “trying to give the appearance of normalcy and legality by associating themselves with sports clubs and thereby gaining the trust of consumers.”

“In Chile, online betting is completely prohibited and outside the regulatory framework and they are illegal and unfair competition,” Mariana Soto, the association’s president, told La Tercera.

Monday’s bill does at least mark further progress towards regulation of online gambling in the South American region.

Last week, Peru’s Ministry of Tourism said it submitted its own bill for online gaming and sports betting to the cabinet of the Peruvian president to introduce in Congress.

Elsewhere, a cluster of at least five provinces in Argentina are establishing licensing regimes for online gambling, while Uruguay’s government filed a bill to regulate online casinos late last year and Brazil is in the process of implementing a 2018 law for sports betting.

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