Chilean Government Presents Online Gambling Regulation Proposals

Chile’s government has introduced new proposals to regulate online gambling, aiming to establish a licensed market for private operators. These proposals face opposition from senators advocating for an outright ban or a monopoly for existing lottery operators.

What Happened

On Monday, October 26, the Chilean government, under President José Antonio Kast, submitted a 114-page package of amendments to regulate the online gambling market. These proposals include issuing five-year licenses to private operators, imposing an advertising ban, new taxes, and player protection measures, according to NEXT.io. The government’s plan mandates an annual licensing fee of 1,000 monthly tax units, approximately $77,000, and a 3% gambling tax in addition to Value Added Tax (VAT), as reported by Chilean newspaper Diario Financiero.

Concurrently, Chile’s Senate is reviewing two alternative amendments. One proposal calls for a complete prohibition on private online gambling operators, while the other suggests granting a monopoly to the country’s two existing lottery operators, Polla Chilena de Beneficencia and Lotería de Concepción. Operators that have been active in Chile without a license over the past year would be ineligible to apply for new licenses, unless they agree to a transitional arrangement with authorities.

Key Details

• The government’s proposals include five-year licenses for private operators, an advertising ban, new taxes, and player protection measures (NEXT.io).
• Proposed financial requirements include an annual licensing fee of around $77,000 and a 3% gambling tax on top of VAT (Diario Financiero).
• Two rival amendments in the Senate propose either an outright ban on private operators or a monopoly for existing lottery entities (NEXT.io).
• The trade association Agrupación de iGaming Responsable (AGR) welcomed the government’s proposals but expressed concern that an advertising and promotional bonus ban could direct players to unlicensed operators (NEXT.io).
• Some offshore operators are reportedly paying 19% VAT on transactions in Chile, despite the country’s efforts to block unauthorized gambling websites (NEXT.io).

Why It Matters

The legislative debate in Chile reflects a broader regional trend of varying approaches to online gambling regulation across Latin America. The conflicting proposals, from establishing a regulated market to implementing an outright ban or a lottery monopoly, highlight a significant policy divergence. According to Sandra Kemp, president of AGR, the existing legal vacuum creates risks for minors, adult users, the state, and platforms unable to compete fairly. She emphasized that a failure to legislate is the least desirable option (NEXT.io).

The government’s amendments aim to create a structured market, but the proposed advertising and promotional bonus ban has drawn criticism from industry stakeholders like AGR, who argue it might inadvertently bolster unlicensed operations. This situation is further complicated by the fact that 39 offshore betting sites have registered with Chilean tax authorities to pay VAT, even as the telecommunications regulator, Subtel, has ordered internet providers to block 42 gambling websites (NEXT.io).

What’s Next

The submitted amendments will now be reviewed by the Senate’s Economy Committee. Finance Minister Jorge Quiroz was invited to explain the government’s proposals to the committee on October 27 (NEXT.io).