Chilean authorities expect online gambling update by March

Chile will share an update on approving online gambling regulation by March according to Undersecretary of Finance Claudia Sanhueza.
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Chile is on its way to approving an online gambling regulation, as the Executive is planning on sharing an update by March. The Undersecretary of Finance Claudia Sanhueza communicated that the authorities set themselves to have regulations, add the changes to the bill unveiled last year and advance on it during the first semester.

Sanhueza appeared before the Economic Commission of the Chamber of Deputies last week to explain the government’s intentions and shared that there are three possible ways to approach the sector.

The first option would be a total ban, while the other two would allow a market under a state monopoly or a semi-open market. The last option includes the digital market, which would be intervened by the Superintendency of Gambling Casinos (SCJ).

SCJ President Vivien Villagrán attended the last session of the legislative body and explained that the ban on online gambling in Chile is an “extremely costly battle” and assured that the regulator will need help from the Internal Revenue Service (SII) or the Financial Market Commission (CMF).

Prosecutor and Dreams Corporate Affairs Manager Carlos Silva Alliende declared against the regulator as he urged an explanation as to why illegal operators have not been investigated by the entity.

Villagrán explained that the SCJ had the intention to make a move against the illegal operators, but refrained from doing so after the Justice argued that only operators harmed by these operations could complain about it.

Proposed changes

As the Undersecretary of Finance commented, several questions about the project have emerged after different meetings with organizations like the SCJ, the CMF, SII, and the Public Ministry, among others.

Some of them revolve around the different ways to attract illegal operators to a regulated online market.

In regard to supervision, there is a lack of clarification on which sanctions will be included in the regulation. Sanhueza called them ‘confusing’ and argued that “the SCJ is granted sanctioning powers over organizations that should not be audited.”

The Undersecretary added that “there aren’t rules that authorize the actions of the agencies that supervise compliance” and said that as proposed, applying alternative sanctions would make the process even more complex.

Sanhueza also talked about tax collection and pointed out inconsistencies between the Tax Reform proposed by the Executive branch and the concept of who would receive the benefits.

She also insisted on the fact that the online gambling tax system design has similarities but is still different from the land-based betting system. According to Sanhueza, “there is room to improve and perfect the tax that finances the [national responsible gambling policy].”

Additionally, Sanhueza warned about user data protection and said that it’s necessary to analyze what will be regulated, due to the rapid transformation of the industry and warned that regulating advertising is “less demanding” than the project proposed by Deputy Marcos Sulantay to ban advertising while the sector is not regulated.

La Polla Chilena de Beneficencia shared another proposal

During the session, the President of the Board of La Polla Chilena de Beneficencia Macarena Carvalho said she’s opposed to regulating the industry.

According to her, users start playing online games in Chile by playing at La Polla Chilena, but they’re ultimately attracted to an unauthorized offer due to the possibility of accessing higher prizes, which are not limited as they are in the state company.

As a result, she stated that she doesn’t think it’s necessary to authorize these companies, which – just like Dreams – she questioned for competing and collecting data unfairly, which will then be used if they’re authorized to operate legally in the future. To conclude, she proposed increasing the prize amount of La Polla to make it more attractive and retain players.