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Legislation

Chile – Controversy over illegal slots continues in Chillán

By - 14 February 2014

The growing problem of illegal slot machines continues to continue to cause controversy in the city of Chillán after the National Comptroller’s office declared that new laws now in place to restrict slot parlours could be illegal.

In November 2013 legislators passed a number of new measures designed to curb the growth of slot machines throughout the city ruling that slot machines may no longer be permitted under the justification that they are games of skill and ability. Instead new measures clearly defined that any system that offered cash prizes or prize through a random number generators were banned outside of casinos.

The law was based around legislation which had already been put in place in the municipalities of both Concepción and Melipilla.  In May 2013 Conception banned slot machines from awarding cash prizes while the mayor of Melipilla ordered that slot parlours could only operate in certain zones and restricted the number of slot machines on site.

However, the watchdog refuted the arguments made by the municipalities of Concepción and Melipilla arguing that they did not have the authority to close slot machine parlours or revoke licences and issued an opinion that clearly defines the role of municipalities in relation to slot machines. According to the watchdog both cities had gone beyond their remit, meaning that Chillán could also soon be forced to back track and repeal laws which were aimed at restricting the proliferation of slot machines.

According to a statement released by the Comptroller’s office in January it was “inappropriate for municipal governments, through local ordinance to put in place closures, revocation or expiration of patents when it comes to certain behaviours which have not been legally established as they (the local municipalities) lack authority to do so.”

It is estimated that there could be as many as 150,000 illegal slot machines located in slot parlours with a further 50,000 slot machines located in small businesses and shops nationwide. Known locally as ‘casinos of the people’ or ‘neighbourhood slots’ they have been able to grow so quickly as local governments have not drawn a clear line between slot machines and Skill with Prizes Machines. The issue is bound to continue to be an increasingly important issue for both the central and local government as licenced casinos have seen revenues falling by as much as 20 per cent: a direct result of the growth of slot parlours nationwide and a smoking ban. At the same time the casino industry generates considerable revenue for both the local and state government.

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