Chile Online Gambling Bill Advances Amid Licensing, Tax Disputes

Chile’s online gambling bill is progressing in the Senate, introducing a licensing and tax regime for private operators. However, disputes over transitional rules and tax burdens are generating industry concern regarding fair competition.

What Happened

Chile’s online betting bill, initially introduced in 2022, has advanced following the submission of significant amendments by President José Antonio Kast’s government to the Senate’s Economic Committee on October 26, according to iGaming Business. These amendments aim to legalize private operators under a new licensing and tax framework. The proposed legislation includes five-year licenses, a 19% VAT on the margin between stakes and winnings, and an additional 3% levy.

The bill also seeks to prohibit advertising and promotional bonuses, while establishing default limits on player deposits and playing time, as reported by iGaming Business. Despite these developments, key disagreements persist concerning the treatment of currently unregulated operators, advertising restrictions, and the differing tax obligations between online platforms and existing brick-and-mortar casinos. Industry stakeholders have expressed concerns that the current proposals could inadvertently favor unregulated entities, potentially jeopardizing the established regulated casino sector in Chile, according to Gaming Compliance News.

Key Details

• The Chilean government submitted amendments to the online gambling bill to the Senate’s Economic Committee on October 26, proposing legalisation for private operators under a new regulatory regime, according to iGaming Business.
• The bill suggests granting five-year licenses, implementing a 19% VAT on the margin between stakes and winnings, and adding a separate 3% levy, as detailed by iGaming Business.
• A contentious element is the proposed transitional regime for currently unlicensed operators, with fee suggestions ranging from 73,000 UTM monthly to a one-off or periodic payment of 3,000 UTM (approximately $219,000), which critics argue may reward prior illegal activity, according to iGaming Business.
• The Asociación de Casinos y Juegos (ACCJ), representing Chile’s licensed casinos, voiced concerns regarding “fundamental asymmetries” in the proposed transitional regime and differing tax obligations, as executive president Cecilia Valdés stated in an interview with Diario Financiero’s DF al Cierre program.

Why It Matters

The progression of Chile’s online gambling bill represents a significant step towards formalizing the online betting market, moving from a period of delays since its 2022 introduction. The proposed framework, including licensing and tax structures, could establish a regulated environment for both new entrants and existing operators. However, the ongoing disputes, particularly regarding transitional licenses for previously unregulated operators and the tax disparity between online and land-based casinos, highlight potential challenges to market equilibrium and fair competition, as noted by iGaming Business.

Industry bodies, such as the Asociación de Casinos y Juegos (ACCJ), have articulated concerns that the transitional provisions, including varying fee structures, could be perceived as lenient towards operators who have functioned outside the legal framework. This perspective suggests a risk of undermining the principle of a level playing field and disincentivizing compliance for future market participants, according to comments from ACCJ executive president Cecilia Valdés. The legislative outcome will therefore influence the competitive landscape and the financial obligations across Chile’s gaming sectors.

What’s Next

The online gambling bill will continue to be debated in the Senate. Senators Diego Ibáñez and Gastón Saavedra have proposed an alternative amendment to ban online gambling entirely, while Senator Daniel Núñez introduced an amendment to reserve the market for Chile’s two existing lottery operators and penalize customers of illegal sites, according to iGaming Business. These proposed amendments indicate continued legislative scrutiny and potential changes to the bill’s current provisions.