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The Chilean Senate has approved, in general terms, legislation that will regulate internet betting websites. The decision, which was passed with 27 votes in favor, three against, and five abstentions, is a significant step towards the establishment of an official legal framework for the sector. The bill will proceed to detailed discussion in the Economy and Finance Committees, with September 29 established as the deadline for the submission of specific amendments.
According to Chile’s Ministry of Finance, the bill seeks to protect the health and safety of gamblers, especially minors, and ensure transparency in the origin and destination of funds generated by such platforms. The bill also attempts to incentivize a competitive market in conjunction with existing legal gambling games such as lotteries, horse racing, and number games.
Balancing Regulation, Public Trust, and Fiscal Objectives
The bill has a number of objectives: protecting public trust by ensuring the randomness of games, increasing fiscal revenue, and establishing fair competition in the gambling sector. Authorities estimate that when the policy comes into force, it will be capable of generating around CLP 84 billion annually in tax revenue.
Finance Minister Mario Marcel explained that the rapid and unchecked expansion of online gambling has been occurring in plain sight, without the payment of taxes or compliance with existing law. He emphasized the need for a regulatory framework for preventing excessive gambling habits and aligning the law with broader initiatives to combat organized crime.
Marcel also noted the bill’s connection to another legislative bill, Chile’s Economic Intelligence project to fight organized crime, which updates the definition of illegal gambling. For consistency, the government prefers that the law on online betting pass before that is signed off.
Strong Oversight and a Path to Legalization
The legislation would have online betting websites registering as Chilean businesses and operating under the regulation of the Superintendence of Casinos and Gaming (SCJ), which would be renamed the Superintendence of Casinos, Betting, and Gambling.
Deputy Finance Minister Heidi Berner stated that the regulatory framework includes both incentives for adhering to the law and strict sanctions for individuals who continue in the illegal market. The Superintendence, along with institutions such as the CMF, SII, Subtel, and UAF, would receive more powers to enforce the regulations.
The legislation would take effect on the first day of the month following its publication, allowing for immediate enforcement against illegal gambling. However, the full licensing regime would only begin once the regulatory framework is published, within six months
Transitional Licenses and Cooling-Off Period
The bill provides an opportunity for operators to enter the legal market by granting transitional licenses to those who have not carried out illegal activities in Chile in the past 12 months and meet technical and financial requirements at international standards.
Websites that are currently operating illegally would only be permitted to apply for licenses after a 12-month cooling-off period, during which they are to cease unauthorized operations. After that period, if they apply for a license, they would be required to pay a one-time substitute tax composed of 31% of gross revenues (to account for previously untaxed revenues) plus an additional 0.07 UTM per user account, based on the last 36 months.
Industry Reaction: Applaud for a Regulated, Transparent Market
The Online Betting Platforms Association, of which Betsson, Betano, Coolbet, Latamwin, and Betwarrior are members, commended the Senate’s overall approval, describing it as a fundamental step toward a transparent, regulated, and secure industry that will protect users and generate significant revenue for the country.
Industry representative Carlos Baeza was satisfied with the Senate approval, pointing out that the industry has been demanding for a long time clear regulations. He said that the approval moves the industry one step forward towards operating in a secure and predictable environment for companies and consumers.
Source: YogoNet
