Chilean Treasury Proposes New Gambling Tax Structure
Chile is making progress with its online betting regulation and a new tax structure is one of the latest additions. The proposed structure was presented by Heidi Berner, Undersecretary of Finance for Chile, during June’s Economic Commission meeting at the Chamber of Deputies. Among the tax changes were other developments which aim to answer public concerns about online betting.
A set of proposals for online betting
The information Berner presented in mid-June addressed public concerns including the promotion of responsible gaming, technical safety and security standards, prevention of problem gaming behaviors, tax collection and the prevention of clandestine activity centered around gaming.
Chile’s proposal for online betting is progressing; the latest development is a new scheme for collecting tax.
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One top priority for Berner was addressing illegal and offshore betting platforms, which have proliferated in Chile as well as in other parts of Latin America. Berner clarified that it is of utmost importance to those working in the regulation process that these sites will be limited and hopefully eventually eliminated altogether.
She specifically mentioned illegal platforms that do not pay tax and do not adhere to any responsible gaming standards. She also spoke about protecting minors; Chile has particularly tough advertising rules around gaming, in part to protect minors from being influenced towards gambling.
The information shared by Berner in June was created based on work done by the Economic Commission, which carried out various hearings. Other groups also contributed their expertise; these included Chile’s Internal Revenue Service (SII), the Superintendency of Casinos (SCJ), the System of Public Companies (SEP), the Financial Analysis Unit (UAF) and the Commission for the Financial Market (CMF).
The Treasury’s goal is to create a competitive and fair online betting market in Chile. Meanwhile, it is essential to address public concerns and create a system that protects consumers, while offering great opportunities for those who enjoy betting to do so safely and responsibly.
The regulations thus far indicate that the power of oversight would go to the SCJ, which already regulates Chile’s gaming infrastructure and is the natural choice for such a role. The SCJ would ideally be granted further powers to help them in going after illegally operating platforms, too.
Often, popular casinos or other betting establishments have operated clandestinely in Chile and it has been difficult to prosecute the behavior or prevent it from recurring. To do so, the SCJ needs full support and cooperation from legal entities in the country.
Similar to Brazil’s recent crackdown on criminal behavior within sports betting, Chile will seek to prosecute criminals and create a better system for tracking past behavior in order to better legislate against it. Meanwhile, the development of a Responsible Gaming Policy is also necessary, not only for online betting but for the gambling industry as a whole.
A new tax scheme
Regarding tax, Berner’s presentation indicated that Chile could increase its gaming tax revenue by nearly double if the proposed changes are implemented. They propose to create a single gaming tax system, whereby winners pay income tax, companies pay sales and services tax, and operators are subject to additional taxes, including a 20% gross income tax.
Furthermore, operators would be subject to a 1% tax specifically to pay into responsible gaming promotion. This would also be applicable to casinos. However, they have let go of a proposal for single and substitute tax on players who register on online platforms, as to not dissuade players from registering legally.
