Chilean lawmakers seek to block online betting tax collection

Deputies from Chile’s Unión Demócrata Independiente (UDI) party have announced plans to introduce an amendment to the 2027 Budget Law that would prevent the country’s tax authority, the Servicio de Impuestos Internos (SII), from collecting taxes from online betting platforms.

The proposal comes amid an ongoing dispute over the legal status of online gambling in Chile, with the Supreme Court ruling against unlicensed operators while the SII pursues tax collection and lawmakers continue debating a regulatory framework.

Deputies challenge tax collection

UDI deputies Marco Antonio Sulantay and Eduardo Cretton said they will seek to prohibit the SII from implementing, administering or maintaining special tax declaration and payment mechanisms for online betting platforms or other activities not authorised to operate in Chile.

The restriction would apply to resources allocated under the 2027 budget, with the deputies seeking support from other opposition parties. Their argument centres on the contradiction between the Supreme Court’s declaration that online betting platforms operate illegally and the state’s efforts to collect taxes from those same businesses.

However, the deputies stressed that their proposal does not amount to opposition to regulation. They remain open to discussing a legal framework but argue that taxation should follow, rather than precede, the establishment of clear operating rules.

Regulatory dispute intensifies

The amendment adds another dimension to Chile’s increasingly complicated online gambling debate. Following the Supreme Court’s September 2025 ruling, enforcement action has continued through the Santiago Court of Appeals, with the Subsecretaría de Telecomunicaciones ordering the blocking of 42 betting websites.

Meanwhile, the SII has pursued measures to apply VAT to online betting platforms. Chile’s Comptroller General declined to rule on the matter following requests from lawmakers and the Asociación Chilena de Casinos de Juego. The legislation intended to establish a regulated online betting market remains in its second constitutional stage in the Senate. Sulantay and Cretton previously sought intervention from the Consejo Nacional de Televisión (CNTV) to suspend betting advertising around the clock.

Operators call for comprehensive regulation

Online betting operators have also questioned the effectiveness of the current approach, although they favour a regulated market in which taxation forms part of a broader licensing framework. Sandra Kemp of iGaming Responsable told Diario Financiero that neither website blocking nor tax collection amounts to effective regulation.

She argued that collecting revenue should be regarded as a transitional measure rather than a replacement for legislation establishing licensing, oversight, transaction traceability and protections for minors. The dispute comes as industry executives estimate Chile’s online betting market generates approximately US$650m in annual gross gaming revenue. H2 Gambling Capital projects that figure could approach US$1.2bn by 2028.

For now, the proposed budget amendment introduces further uncertainty over how Chile intends to treat an industry that remains outside a formal licensing regime. Its prospects will depend on securing sufficient parliamentary support during budget negotiations, while the Senate’s progress on the online betting bill will determine when a permanent regulatory and taxation framework might be introduced.