Chile’s Online Casino Debate to Be Revived

Posted on: January 16, 2023, 10:39h. 

Last updated on: January 16, 2023, 12:08h.

Latin America continues to see growth in the online gaming segment, and more changes are coming this year. Several countries are exploring legislative options to pave the way for digital casinos, and Chile could make a move forward within the next 12 months.

Chile flags
Chileans wave flags in support of the defeat of a measure to create a new Constitution in September 2022. The government is preparing to tackle new legislation to possibly approve online gaming in the country. (Image: Reuters)

The bill that seeks to regulate online gambling in Chile has suffered delays in recent months. However, now that a new year has arrived, the debate in the Chamber of Deputies is returning.

The Ministry of Finance reported it will deliver input to advance the discussion this March. The announcement occurred last week during a visit by the Undersecretary of Finance, Claudia Sanhueza, and the Superintendent of Gaming Casinos, Vivien Villagrán, to the Economy Commission of the legislative chamber.

Everyone Wants Input

After analyzing the proposal, lawmakers focused on international operators. They’re taking a closer look at activity in countries where those operators have received authorization, as well as in those that have not yet established regulatory frameworks.

Villagrán is supportive of online gaming. She recognizes that regulations need to include flexibility to meet a constantly changing ecosystem, and emphasized the importance of taking swift action.

Chile, like any country, has no chance of stopping online gaming. As a result, some see regulation as the best method to approach online casinos instead of banning them.

The initiative under discussion would allow operators to obtain a renewable, five-year general license or a temporary license for six months. The latter would not be nonrenewable. Either license would allow them to offer any type of betting or gambling, depending on what they request, except lottery products.

The regulations would prohibit any activity that violates “public order” or national security, or that targets minors.

In addition, operators would need to establish a base of operations in Chile and show the source of the funds that cover the business expenses. They would have to provide the details about who’s behind the operations, as well as report suspicious transactions that might signal money laundering.

The supervision of online gambling and betting would fall on the Superintendence of Gaming Casinos. The bill under discussion would create a new name for the regulator, the Superintendence of Casinos, Betting and Gambling.

Tax Revenue a Driving Factor

Villagrán and Sanhueza recognize that online gaming is already taking place in Chile. Therefore, they also recognize that the country is losing money with potential revenue from iGaming currently heading across its borders.

Therefore, one of the biggest factors for pushing online gaming is tax revenue. The government wants to implement a tax strategy to replace the VAT (value-added tax), requiring operators to give up 20% of their gross income.

The general license would cost 1,000 UTM per year and a temporary license would cost 100 UTM. The UTM is a standard tax measure, and 1,000 is currently equal to CLP61.77 million (US$74,616). 100 UTM is roughly US$7,460.

Online sports betting platforms will be responsible for the same figures, but will have additional costs. They must deliver 2% of their gross annual revenue to the National Federation of the target sport of the bet. In addition, operating companies must spend at least 1% of their gross annual revenue on responsible gambling campaigns.

Users will also be affected by Chile’s gaming tax plans. They will have to pay 15% of their winnings when withdrawing money from their user account.

There is still no definitive time frame for the legislation to make its way through the system. It has already been over a year since the process began, and will likely take at least another six months before lawmakers make any real progress.