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Chile – New laws for Chile’s slot machines a matter of urgency

By - 15 July 2019

President Sebastián Piñera’s administration has announced that the draft law on slot machines that is currently underway in the National Congress will now become a matter of extreme urgency.

According to government spokeswoman, Cecilia Perez, it should be regulated above all by “those communes where there are more vulnerable sectors that are impoverished day by day because they have access to an illegal offer such as slot machines”. Sanctions and inspections will be established for the use of these machines she said.

The decision was taken as a result of a report published by the investigative team of Radio Bío Bío, which revealed that slot machines operating outside of casinos in Chile are illegal since none have the required certification issued by those companies authorized by the Chilean Gaming Control Board (SJC).

Their illegality has already been established by the board but because it lacks oversight powers, none are certified allowing dozens of mayors to authorize them through commercial patents, as a way to obtain greater economic resources.
In January 2017 the Office of the Comptroller General of Chile issued a statement clarifying the procedure for the municipal governments when it comes to defining when machines should be classed as gambling machines. The new guidelines indicate that the municipalities should ask those interested in obtaining permission to operate electronic gaming machines to obtain a report from the SJC stating that prizes are not handed out randomly by the electronic machines on their premises.

The rules give the SJC the right to determine what constitutes random and what constitutes entertainment machines and state that only certifications issued by gaming laboratories approved by the SJC have the capacity to verify conclusively if a machine is either a gambling machine or if the result depends on an element of skill. The Office of the Comptroller General now considers that municipal governments must follow the new guidelines as the only guide when it comes to how they define gambling and non-gambling machines in their respective jurisdictions. According to estimates the industry is worth around US$494m – a similar amount to the regulated industry.

At the end of September, the executive indicated that it aimed to prohibit slots outside of casinos. In October the senate decided to advance with its plans to prohibit and eliminate slot machines that are located outside of casinos. Alejandro Navarro, parliamentary forerunner of the project, welcomed the news now coming out of the President’s office saying that the new law meant the end for illegal slots in Chile.

The rise of illegal slot machines in licensed arcades is down to local municipalities as local governments have allowed them to operate in their jurisdictions but have not drawn a clear line between machines that award prizes and those that have an element of skill involved (skill with prizes machines) and slot machines. Subsequently, a great many slot parlours house both with revenue increasingly deriving from the latter.

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