Chile: iGaming platforms won't obtain a license if they operared in the 12 months prior to their application

Chilean Chamber of Deputies continued with the vote in particular of the bill that seeks to regulate the online sector and, in its most recent session, approved that iGaming platforms that have operated illegally in the 12 months prior to the application for the license will not be authorized by the Superintendence of Gaming Casinos (SCJ).

Such prohibition for the granting of operating licenses for the online sector is outlined in Article 13 (i) of the bill and was included in the proposal of the Chilean Executive. During the session, the directive was supported by the Undersecretary of Finance, Heidi Berner.

The text reads: "[It will be] cause for rejection to be part of a business group that, through any of its entities, has operated a betting platform without the due operation license, or without the certification that authorizes to operate according to this law, or advertised or offered its services in Chile, in the last 12 months prior to the application".

It also adds that "this provision will affect all the platforms that currently operate illegally in the country".

The legislative provision warns that "the catalog of conducts or actions to determine that a platform has operated, advertised or offered its services in Chile includes the following:

• Having allowed the crediting of users' accounts or the payment of bets in legal tender.
• Using the media to advertise or promote its services in the national territory, as well as operating under a name that uses references to the country, its territory, and publicly known or historical characters.
• Sponsoring, endorsing, or having similar contracts with persons, entities, and/or events carried out in the national territory.
• Operating through a company incorporated in the country.
• Offering services through a web domain ending in dot cl (.cl).
• Using the national emblem or the presence of symbols that contain elements intimately linked to the country.
• To mention or be duly regulated by the Superintendency or authorized by any other Chilean entity.
• Using any means of payment authorized by the Commission for the Financial Market (CMF) or facilitating transfers and/or national bank deposits as a means of payment.

Chile's Economics Committee of the Chamber of Deputies

Links with other jurisdictions

Following the debate on Article 13, paragraph h was also approved, which defined that the SCJ will also not grant a license "to operating companies that are related or are part of a business group that operates in other jurisdictions without having authorization from the competent regulatory authority in such places, provided that they require administrative authorization to operate legally".

"They will also be rejected when having such authorization, they operate their services using software, equipment, systems, terminals, and instruments, provided by third parties that, in turn, provide these services to platforms that do not have authorization in the respective jurisdictions", the authorities stated.

In this context, the text adds, "the Superintendency shall maintain a list of all jurisdictions that require online gambling companies to be authorized to operate, and may request assistance from the agencies that oversee them in their respective countries".

Supreme Court Ruling

During the session, reference was also made to the Supreme Court ruling that ordered an internet provider to block access to 23 online gambling sites, and Berner stated that the bill in question reaffirms that these online gambling platforms are illegal and that is why legislation is being passed to build a regulatory framework. 

"The online gaming platforms are as illegal today as they were a couple of months ago when we started to process the indications and this is what I have always maintained. In fact, the Internal Revenue Service filed a lawsuit against them for engaging in clandestine trade and when it enabled digital services to pay VAT and these platforms assumed that they had to pay it, precisely because they were illegal, the Internal Revenue Service prevented them from continuing to do so through the simplified platform", Berner explained.

In addition, the Undersecretary of Finance said that they share the ruling and that "a law that allows for a more adequate regulation of this activity must be issued, as does Article 13, which has just been approved and which gives the Superintendence of Gaming Casinos the power to deny operating permits".

"This is totally consistent and is in line with the Supreme Court's ruling, as are other norms proposed in this bill", she concluded.