The bill, which was approved in the first stage by the Chamber of Deputies in December, aims to create a competitive market. It also seeks to safeguard public trust, protect the health and safety of players, ensure transparency in the origin and destination of resources obtained from gambling and raise revenue for state coffers and sports.
Online betting platform operators will need to establish themselves as anonymous corporations in Chile dedicated to an exclusive purpose. They will have to have a minimum capital of 2,000 UTMs, (Unidad Tributaria Mensual is a monthly unit of account used for tax purposes in Chile) and a maximum of 10 shareholders who must identify their beneficiaries.
The bill grants new powers to the SJC, the Financial Market Commission (CMF), the Internal Revenue Service (SII), the Telecommunications Subsecretariat, and the Financial Analysis Unit (UAF). The platforms will be required to provide remote access to their systems for effective oversight by the Superintendency of Casinos and the SII.
“As the Executive branch, we consider it absolutely necessary to regulate this digital betting industry, which currently operates illegally. While the Supreme Court ruling confirmed the illegality of these platforms’ operations, we lack effective tools to prevent them from operating. For example, the Supreme Court’s decision on September 12 applied to a single internet service provider to block a specific set of platforms. The Telecommunications Subsecretariat does not have the authority to extend this measure to other operators,” Heidi Berner said.
In September Chile’s highest court accepted an appeal from lottery operator Polla Chilena de Beneficencia and ordered the blocking of online betting platforms. According to the court resolution, these websites “carry out gambling activities within the borders of Chile, without legal authorization or from any national tax authority, which is why they are illegal according to national regulations.”
The bill will impose a cooling off period for those operators who had offered their services in Chile over the previous year once it is published in the Official Gazette. Temporary licenses will be issued to begin with. Berner also highlighted provisions protecting users, especially children and adolescents.
The bill also addresses the lack of effective tools to combat illegal gambling. According to the SJC there are over 900 unlicensed platforms operating in Chile. To prevent this media will only be permitted to broadcast advertisements or promote authorized platforms. Control measures for payment methods, including the general blocking of transactions to unauthorized platforms will be put in place. Entities operating without authorization will be prohibited from having bank accounts in the country. Meanwhile Internet service providers will be obligated to block access to unauthorized platforms while downloading apps from unauthorized platforms will also be prohibited.
Authorized platforms will be required to pay an annual levy of 2% on gross revenues from sports betting in favour of the National Sports Institute (IND). For lottery operator Polla Chilena, 22% of the gross revenues from its Xperto sports predictions system will go to the IND under the same terms. Currently, 15% goes to state coffers, and 12% to IND. This reduces their total tax burden from 27% to 22%.
The proposed tax system for online gambling platforms is based on the current regime for land-based casinos. This activity will be taxed with VAT. As with gaming casinos, a specific tax of 20% will be applied to online platforms. To promote responsible gaming, a specific tax rate of 1% will also be imposed.