Chile Votes on Online Gaming

The long-awaited vote on an online gaming proposal in Chile is finally set to take place in early April, 2023. The project has become a complicated affair between various powers connected to the industry, from land-based casino sites and gaming houses to online betting operators, as well as Chile’s tax authority, the SII. Chile’s federal legislative branch will finally move forward with a vote, following the traditional legal process.

Empty chairs from above in a senate chamber.

Chile’s federal government finally puts online gaming regulation to a vote in April 2023.
Joakim Honkasalo/Unsplash

Online gaming will be voted on in April

The first vote takes place within the Economic Commission of the Chamber of Deputies. Though the legalization of online gaming is also a social issue, it is primarily an economic concern when it comes to federal governments, as illegal gaming denies governments significant revenue via tax collections every year.

Miguel Mellano, who heads the Economic Commission, confirmed as much in speaking to a local news outlet, La Segunda. He explained that the general vote about the project will aim to get the process going, so that Chile’s government can soon benefit from issuing licenses to online gaming platforms and regulating the somewhat clandestine industry.

Heidi Berner, Treasury Undersecretary, also expressed her interest in the vote. Speaking on behalf of the Treasury, she explained that they would like to move the project forward. The new vote is good news considering how much of a delay has been experienced concerning this specific bill in Chile. It was originally set to be voted on in August 2022, around eight months ago, but delays were necessary due to a new Chilean tax reform.

The tax reform was meant to include a new online betting-specific tax. The delay was only supposed to last for 30 days, but the 30 days came and went without any update from the Ministry of Finance.

What could be voted into law?

As it stands currently, the new project would create a system for licensing for online betting sites in Chile. A license could last for up to five years — with the option to renew — or a license could just be issued on a temporary, six month basis.

These licenses could cover any type of online betting and gambling, but would not be valid for lotteries. Companies that are shown to promote gaming to minors, or to incite violence or threats to national security, would also be barred from receiving operating licenses.

Further details of online gaming in Chile

All companies would be required to have a legal base in Chile. They would also be required to show the origin of their funding, presumably in order to both avoid cases of money laundering and other fraud, as well as to show that they have adequate resources to continue operating for the license term.

Furthermore, companies must agree to report any suspicious activity, which would anyway be monitored by Chile’s gaming authority, the Superintendence of Gaming Casinos. All those of the legal age who register would be allowed to take part on online platforms.

The Superintendence of Gaming Casinos would also undergo a name change to the more accurate Superintendency of Casinos, Betting and Games of Chance. Licensed platforms are required to pay 20% of their gross income as well as a license payment (1,000 UTM) per year.

For those platforms that also cover sports betting, an additional tax is required: 2% of annual gross income would be given over to the national federation covering the sport(s) in question. Another 1% of annual income would be earmarked for promoting responsible gambling.

Players also pay a tax in this system. When withdrawing winnings, they must pay 15% of earnings to the state. The SCJ estimates that all in all, legalizing online gaming will contribute $11.5 million USD to the national coffer in year one, with a revenue increase of possibly $60 million USD by year five.

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