Chile Online Operators Urge Regulator Overhaul

June 19, 2024
Chile’s unlicensed online operators are calling for “modernisation” of the national gaming regulator, the Superintendence of Casino Gaming. 

Chile’s unlicensed online operators are calling for “modernisation” of the national gaming regulator, the Superintendence of Casino Gaming (SCJ).

The move comes in the midst of a fierce legal and lobbying battle to legalise online gaming, in which the SCJ's position that unlicensed online operations of any kind are illegal is publicly disputed by the legal representatives of prominent offshore betting brands.

The online operators, represented by lawyer Carlos Baeza, insist that they are not illegal.

Baeza told local newspaper Diario Financiero that the institutional design of the SCJ is “old-fashioned, rather related to what happened in the early 1980s, with the privatisations” of various state-owned industries.

He claims that the SCJ has inbuilt political biases and cites past examples of institutional overhauls that could be emulated, including the Chile Superintendence of Banks and Financial Institutions (SBIF), which became the Commission for the Financial Market (CMF).

In 2019, the CMF, “a decentralised public service”, assumed the responsibilities of the former insurance and securities regulator and the former banking regulator to consolidate under one banner that supervised financial markets.  

The idea, according to Baeza, is that the reform of gaming oversight could be part of the bill to regulate online sports betting and gaming that is currently being reviewed in Chile's Senate after being approved by the lower house of Congress late last year.

Baeza told Vixio GamblingCompliance that “the strategy is going to be to send a memo with a comparative analysis of the different jurisdictions. At the moment we have to make the presentation in the Senate finance committee, which is what is coming now." 

“The indications [to reform the regulator] can only be made by parliamentarians and we will include this in our agenda of topics in lobbying meetings,” Baeza said.

The SCJ and other Chilean interests have taken multiple actions against online operators in the past two years, with the country's main public lottery most notably winning a ruling in the Supreme Court last September ordering a prominent internet service provider to shut down 23 sites in the country.

The ruling was the first time that grey market operators have been specifically labelled as illegal in a higher court of law. 

The online gambling bill is currently with the finance committee in the Senate, but it could take several weeks or even months to be discussed on the Senate's already packed agenda.

In its current form, the bill includes a 12-month cooling-off period for current grey-market operators before they could apply for a licence, and an effective tax rate of around 38 percent between a specific gaming tax and VAT.

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