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The Chilean Financial Market Commission (CMF) has issued a clear position on the services provided by payment operators to online casinos that are not authorized by the CMF, requiring that the payment operators only provide services for activities that fall within the scope of the current Chilean law.
Their question came from the public consultation launched by the regulator to revise the list of activities in which payment card operators can engage, which was raised by the CMF President Catherine Tornel during a recent meeting. The proposal follows Chile’s efforts to determine the legal status of unlicensed online gambling sites.
CMF Proposal Targets Unauthorized Gambling
Under the consultation, payment services would have to be provided to entities operating in accordance with Chilean legislation and holding the necessary authorizations. It would also apply to activities done overseas if they were illegal in Chile if they were done here.
Tornel was queried on whether the provision would be able to stop payment operators from continuing to offer services to online casinos that are not specifically licensed in Chile. This is one of the activities outlined in the proposal, she said, and casino business is allowed to operate in the country only for certain companies that have the necessary license.
According to La Tercera, Tornel explained: “If these services are not offered by those specific companies, they would not be legitimate, and therefore payment operators could not provide payment services to these companies that do not have businesses legally recognized in Chile.”
Restrictions Could Also Affect Payouts
The implications of the proposal would go beyond the deposit amounts placed by the user. Tornel had also been asked if this would also be the case for payouts, including processing withdrawals from online gambling sites.
The CMF president confirmed that payouts would also fall under the proposed framework. “Yes, it applies to casinos. If our regulation is approved in the way it was presented for consultation, payouts could not be made to activities that are illegitimate in Chile, and this is effectively an activity that, until now, is illegitimate,” Tornel said.
Wider Regulatory Pressure on Online Betting
The CMF’s decision follows other moves by the government to crack down on gambling without a license in Chile. The Supreme Court has decided on the legality of unlicensed betting sites, and the authorities have also made attempts to meet their tax obligations.
The Internal Revenue Service (SII) has introduced a solution to allow foreign betting companies based in Chile to meet the requirements of Digital VAT when they register in the Digital VAT system. Tax registration, however, does not in itself imply authorization to operate according to the gambling regulations in Chile.
If the proposal by the CMF is eventually accepted as is, payment operators may find it difficult to collect funds from their customers as well as to make payouts to gamblers on illegal platforms.
The measure would thus be another step in Chile’s strategy for online gambling, along with licensing, tax, and enforcement requirements, in deciding who will have access to the country’s financial system.
Source: SBC Noticias
