Chile: Online gambling bill receives preliminary approval from Chamber of Deputies, advances to the Senate

The Chilean Chamber of Deputies has approved the bill that seeks to regulate the online gaming and sports betting sector. Therefore, the proposal advances to the Senate, where it will be discussed by the corresponding commissions.

The text was generally supported in two votes: the general provisions were approved by 80 votes in favor, 36 against, and 18 abstentions; while the special quorum rules obtained 97 votes in favor, 28 against, and 9 abstentions. The separate votes ratified the articles passed by the committees.

During the debate on the bill, the reports of the Economy, Sports, and Finance Committees were reviewed, which were presented by the presidents of each group, deputies Miguel Mellado, Jorge Guzmán, and Jaime Naranjo, respectively.

Meanwhile, different deputies intervened in the debate with opposing points of view. On the one hand, those who supported the legislation highlighted the regulation of the expanding betting shops sector in Chile and considered that, at present, it is a black market that operates without any supervision whatsoever.

They also highlighted the need to protect consumers and increase tax collection. They also supported requiring liquidity from operating companies, promoting responsible gambling, and preventing gambling addiction. Likewise, they said the Internal Revenue Service (SII) and the Financial Analysis Unit (UAF) should be granted new supervisory powers.

Chilean Congressman Miguel Mellado

On the other hand, those who rejected the proposal criticized the conflicting opinions of the Ministry of Justice, which considers the platforms illegal, and the Ministry of Finance, which intends to regularize them. They added that such activity does not contribute to tourism or services within the country.

For her part, the Undersecretary of Finance, Heidi Berner, emphasized that online gambling "is illegal and that there are no tools to fight it today". For this reason, she said the bill has been strengthened in its discussion in the Economy Commission. Along these lines, she stated that the owners of the platforms would be made known.  

Tax burden

The approved proposal establishes that each online betting platform will pay a general license tax of 1,000 UTM per year for operating rights and, in addition, they are obliged to allocate 2% of their gross income to sports.

Of this percentage, one-third will be delivered to the National Sports Institute, which will distribute it to the various sports federations in force. The second third will go to the Chilean Olympic Committee, while the remaining third will go to the Chilean Paralympic Committee.

Furthermore, in terms of taxes, the rules are similar to those applicable to casinos, considering the income tax of the operating company and the VAT for being an entertainment service, in this case, a digital one.

A 20% tax on gross income is also established. In addition, a tax called responsible gaming contribution tax is equivalent to 1% of its annual gross income. This, with the possibility of discounting disbursements if actions are destined for such purpose.

Regarding fiscal tools, new powers are granted to the SII and the Superintendence of Casinos, Betting, and Gaming, and the existing ones are improved. New powers are also granted to the UAF, the Financial Market Commission (CMF), the Undersecretary of Telecommunications (Subtel), and the Public Prosecutor's Office. 

Objectives

The Chilean Chamber of Deputies stated that "the regulation aims to generate a competitive online gambling market", in addition to "safeguarding public faith, protecting the health and safety of gamblers, and increasing tax revenues". "It aims at making transparent the origins and destination of the resources obtained through these platforms," they stressed.

"The law will establish the conditions and requirements for the authorization, operation, administration, and control of the platforms that allow online gambling. It also prevents the access of children and adolescents to these platforms and the development of addictive behaviors related to the development of betting", they added.

Finally, they stated that the approved text "prevents and punishes illegal gambling by expanding the catalog of crimes", and that "at the same time it regulates advertising and promotion activities, and safeguards the fiscal interest and the holders of the platforms that have an operating license".

Cecilia Valdés, president of the Chilean Association of Casinos

ACCJ's opinion

Before the vote, the president of the Chilean Association of Casinos (ACCJ), Cecilia Valdés, expressed herself in favor of the bill and stated that "it is a fundamental regulation for the industry, which not only comes to regulate online platforms but also modifies some points of the casino law".

In an interview with the Chilean media El Tipógrafo, she said that "it is a bill that has been discussed in depth for a long time, but it can still be improved".

"Our position as an association of casinos is that there must be a law that allows online gambling platforms to operate, but that those that have operated illegally must comply with a cooling off period so as not to generate market asymmetries and so that other competitors can enter on equal terms", she said.