Chile’s chamber of deputies approves online gaming bill

Shirley Pulis Xerxen December 14, 2023

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Chile’s chamber of deputies approves online gaming bill

This has been quite a week for the LatAm gaming region. Following Brazil giving the greenlight to regulate sports betting, now Chile has approved its online gaming bill, which includes a colling-off period for current grey market operators. Passed through the Chamber of Deputies, the bill now will require the Chilean Senate’s final approval.

Tumultuous journey to regulation

Chile’s Chamber of Deputies has given its approval to the government’s gaming regulation bill, marking a crucial milestone in the country’s turbulent path towards regulating onl ine gaming. The legislative journey faced potential collapse in September when the Supreme Court ordered the blocking of all gaming sites.

Key provisions of the legislation

The approved legislation outlines the framework for a new online gaming licensing system, featuring a robust regulator and a significant 20% revenue tax. Operators will be obligated to contribute 1% and 2% of gross revenue to responsible gaming projects and Chilean sports, respectively. The law also criminalises black market operations, establishes responsible gaming measures, and regulates advertising and promotions.

Strengthened regulatory framework

The regulatory body will undergo a transformation, now named the Superintendency of Casinos, Betting and Games of Chance. It will assume a central role in licensing and regulatory activities. The Internal Revenue Service gains expanded inspection powers, focusing on the new online gaming market.

Financial obligations and responsible gaming strategy

Licensees are required to pay an annual fee of 1000 UTM ($73,100) for operation. The Ministry of Finance, with input from the gaming regulator and Ministry of Health, will formulate the country’s responsible gaming strategy. Financial bodies, including the Financial Analysis Unit, the Financial Market Commission, and the undersecretary of telecommunications, will collaborate to combat money laundering.

Long road to regulation

The Ministry of Finance initially proposed gaming market regulation in 2021 under the previous government. Surviving the 2022 elections, a bill was introduced in March 2022. Despite setbacks, the Chamber of Deputies’ Economic Commission approved the bill in June, affirming its tax framework. However, a unanimous Supreme Court decision in September cast doubt by blocking all online gaming sites.

The approved bill will now proceed to the Senate, where reports suggest intensive lobbying is underway to modify the tax rate.

Controversial Article 13 and Taxation Concerns

A critical aspect of the bill is Article 13, imposing a 12-month cooling-off period for current grey market operators before applying for a local license. The headline tax rate of 20% gross gaming revenue for online operators, when considering value-added tax (VAT) and additional charges for responsible gaming and sports betting, raises concerns. Critics argue that the effective tax rate, reaching approximately 38% of GGR, may hinder the industry.

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