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Latest Updates in Chile’s Online Gambling Scene

Online gambling in Chile is constantly growing, hence an increase in new developments, including but not limited to the legal status of online gambling in Chile and much more.

Chilean regulation of casinos and gambling is quite strict and has a rich history: the first laws in their history were passed back in 1812.

Until 1990, the only type of gambling allowed in Chile was betting on horse races. This was mainly in the form of pari-mutuel betting on the track, which can still be done at all five tracks, as well as on dog racing. Whilst this suited many Chilean sports bettors and remains very popular to this day, other betting markets, such as football, were conducted illegally.

The first legal sports betting in Chile appeared in 2008 when lottery operator Polla Chilena requested permission to offer fixed odds betting.

The Newest Updates in 2022: the Bill 035/2022

In March 2022, Bill 035/2022 was introduced to regulate the development of online gambling platforms. The proposal is currently being discussed in the Economy Commission of the Chilean Chamber of Deputies and could be approved by the end of 2023. Current legislation prohibits even the country’s licensed land-based casinos from offering their services online. 

Key aspects to be addressed include: 

  • Identifying a specific regulator responsible for overseeing the platforms;
  • introducing a licence to allow companies to operate in this area;
  • Establishing special taxation for the online gambling industry like the way taxation is done in Australia

In terms of taxation, the current version of the bill establishes a special and substitute tax of 20 per cent on the gross revenue of an online betting platform. This tax will be applied in place of VAT. 

In addition to this specific tax, other specific taxes are also provided for: 

  • a 2% rate is to be levied on gambling on sports and is to be sent to the national federation of the sport on which the bet is placed
  • 1 per cent of a company’s gross revenue must be allocated to promote responsible gambling
  • Users are subject to a substitute tax of 15 per cent on gambling income instead of the income tax that should apply

The initiative is a measure to protect licensed operators from grey market activities and will allow companies registered in Chile to obtain a general licence for five years, renewable, or a temporary licence for six months without renewal to operate any betting and gambling facilities, with the exception of lotteries.

Up-to-Date Status of the Bill 035/2022

In August 2023, the Economic Committee at Chile’s Chamber of Deputies announced that they would publish 15 new articles as part of the legislative framework for Bill 035/2022. 

Undersecretary Heidi Berner said the new articles set out the context for the prosecution of criminal activity connected to online gambling, introducing criminal penalties for the violation of online gambling regulations. For example,

  • article 40 allows authorities to prosecute unlicensed gambling
  • article 15 imposes penalties of minor imprisonment and a fine of 15 to 20 monthly tax units for the alteration of a betting event to affect a market outcome
  • article 28 establishes that following this regulation, the Superintendent of Gaming Casinos may not authorise, as an object of betting, drawings or lottery numbers, nor thoroughbred horse racing races held in Chile or abroad
  • article 38 says that for those who use someone else’s account and for those who offer their own account to third parties, the penalty will be a minimum term of imprisonment and a fine of 6 to 20 monthly tax units
  • other articles deal with penalties for corruption, cybercrime and fraud related to online gambling

Also, in July 2023, the National Congress, led by Sports Minister Jaime Pizarro, announced the creation of a commission to review the relationships between football clubs and both international and domestic gambling companies. It will also probe a disagreement between the National Association of Professional Football (ANFP) and the Ministry of Justice about betting sponsorship.

The ministry has ordered the ANFP to enforce rules introduced in Chile’s new Sports Integrity Bill, which bans the marketing of illegal activities. However, the ANFP argues that sports betting is legal and that it expects the government to introduce a legal framework.

How Does the Bill 035/2022 Affect the Gambling Market and the Chile’s Economy?

The online gambling industry in Chile has paid 90bn Chilean pesos in taxes (just over $100m) and could collect between $50m and $100m if the sector is regulated. According to the Chilean Casino Gaming Association (Asociación Chilena de Casinos de Juego, ACCJ), there are around 900 digital platforms that do not comply with the law and between $130 million and $170 million of bets per year pass through them.

Legally operating casinos generate millions of dollars in revenue for the state, provide tens of thousands of direct jobs and account for up to 40% of the budgets of the regions where they are located. Hence, the interest in regulating and creating a legal and fiscal framework that equalises both activities.

eSports

In terms of cybersports, Chile is an emerging market. Recently, the National Professional Football Association (ANFP) launched the first official FIFA league in Chile with great success, with 12 teams and 24 players. The event was so well received that reputable teams such as Universidad de Chile continue to sign up for training.

According to a statement from Panam Sports and the Global eSports Federation, Chile hosted the first Pan American Cybersports Championship in 2023, which was held in October in Santiago de Chile alongside the XIX Pan American Games. According to an official statement released by the international organisation, the Pan American Cybersports Championship featured various video game athletes from 41 countries across the continent. 

Conclusions

Chile is undergoing significant changes in its online gambling landscape, marked by the introduction of Bill 035/2022. The proposed legislation, currently under discussion, seeks to regulate online gambling platforms by appointing a specific regulator, implementing licensing requirements, and establishing a distinctive taxation system. The bill aims to address issues of grey market activities, protect licensed operators, and promote responsible gambling. With potential approval by the end of 2023 or the beginning of 2024, these developments reflect a proactive effort by Chile to adapt its regulatory framework to the evolving dynamics of the online gambling industry. In comparison to more established markets like Australia with a great selection of online casinos with fast withdrawal, Chile’s approach showcases a growing global trend of countries refining their regulations to strike a balance between industry growth and responsible gaming practices.

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