Chilean Senate to review gambling bill

The Chamber of Deputies has approved the draft legislation.

Chile.- The Senate is to review Chile’s Bill 035/2022 after its approval by the Chamber of Deputies. The draft legislation is intended to reform the regulation of gambling in the country, including the launch of online gambling.

The Chamber of Deputies approved the draft, which is still missing key technical requirements, by 97 votes to 28. The Senate will now evaluate the bill’s text and framework.

The Chamber of Deputies’ Economic Commission endorsed the Ministry of Finance’s recommendation of 20 per cent tax on gross income from online gambling. Meanwhile, it recommended a responsible gambling tax of 1 per cent for all gambling verticals, including land-based gaming. Online licensees will also need to contribute 1,000 monthly tax units (UTM) per year. The value of UTM vary by month according to the consumer price index.

The commission has recommended a further 2 per cent tax on the income of sports betting operators. This would be distributed to sports federations, the Olympic Committee and the Paralympic Committee by the National Sports Institute, IND. It agreed to a request by the state-owned pools betting operator, Polla Chilena, to remove the limit on the return of prizes by monopoly firms.

Since the bill was authorised in March, government departments have been working on policy provisions. Some 15 new articles define the online gambling activities to be licensed and those to be prohibited.

Article 40 will allow authorities to prosecute unlicensed gambling, while Article 15 imposes penalties of minor imprisonment and a fine of 15 to 20 monthly tax units for the alteration of a betting event to affect a market outcome. Other articles deal with penalties for corruption, cybercrime and fraud related to online gambling. Berner said the articles would “safeguard transparency and safety in virtual betting activities”.

To operate online gambling in Chile, licensees will need to register all products with the Ministry of Finance and will need to register a legal beneficiary to represent the licence. The beneficiary can be Chilean or foreign and will hold voting privileges or veto rights related to an applicant or operating firm.

In the meantime, the Supreme Court of Chile has upheld a legal challenge against the presence of online gambling in the country. The case was brought by Polla Chilena de Beneficencia, Chile’s state-owned lottery and pools operator, which had called for the court to rule that online gambling was an illegal activity.

The court voted 5-0 in favour of the state operator, finding that the existing presence of unregulated online gambling conflicted with the government’s plans to introduce a regulated market. It has ordered the government to block access to online gambling websites, which it said must be “considered illegal until the government finds a regulatory status for online gambling”.