Chilean Commission approves a bill that regulates online betting

Santiago, Chile
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The Economic Commission of the Chilean Chamber of Deputies approved Bill 035/2022, which regulates online betting, with nine votes in favor, three against and one abstention.

The measure was introduced in early March 2022 but had not made any progress until this week. Although it faces multiple discussions and votes, this approval is a sharp change from recent developments in the gambling industry in Chile.

Currently, the only companies that can offer online services in Chile are Lotería de Concepción, Polla Chilena de Beneficencia and Teletrak.

In March, the Internal Revenue Service (SII) ruled that it has the power to exclude from the simplified tax regime those companies that don’t have local addresses and carry out illegal activities. Betting is included under this category, at least for now, as the activity doesn’t have a regulatory framework.

Furthermore, at the end of April, the Chamber of Deputies approved another bill that considers agreements between sports clubs and sportsbooks illegal. The measure will be reviewed and voted on by the Senate.

The Economic Commission focused on “continuing the general discussion of the bill that started as a result of a message from the President.” The bill specifies that online betting should be regulated.

The discussion included the testimony of the National Director of the National Consumer Service (Sernac) Andrés Herrera and the President of the Commission for the Financial Market (CMF) Solange Berstein.

In order to move forward, the project will be subject through a consultation period, which is set to end on June 12.

Speaking to El Dínamo, Carlos Baeza, legal representative of Betano, Betsson, Coolbet and Latamwin, said: “[This] is an excellent sign because Chile will be among 73% of the OECF countries that have regulated online betting platforms in a comprehensive way, addressing the institutional, tax and advertising requirements of the industry.”

Baeza also assured that the regulation is needed for users to differentiate platforms that meet legal requirements from those that don’t.

“This is moving towards what we’ve always wanted, which is an activity completely legal.”

He added: “The technical work promoted by the Ministry of Finance was very important to continue with the regulatory process. We trust that they will continue participating.”

According to estimations from the gambling regulator, the Superintendency of Gambling Casinos (SCJ), the current market has annual operations worth between $130m and $170m. However, this number could double in five years through authorized licenses and a legal framework.

The SCJ expects to collect $50m annually, which would be directed to public spending. The regulator would then change its name to embrace other responsibilities, and it would supervise the industry and the licensing process.

Once approved, the project would pave the way to a competitive market with local and international companies.

The Government also hopes that it will open the doors for the regulator to have better tools to mitigate problem gambling, protect cybersecurity and data, and prevent the participation of minors.

In order to bet, people will be required to have a Unique National Role (ID). The goal is “to assure that the account holder is indeed the person placing the bet, reducing the risks of participation from minors or self-excluded people.”

The text of the bill highlights the Colombian market, where companies with a general, five-year renewable license, can offer their services. If approved, Chile would have a similar system.

“These licenses will be granted through a non-competitive and administrative process, since it’s difficult to evaluate one proposal over another, nor is it possible to establish mechanisms of exclusion or territorial monopoly,” the bill says.

To access a license, operators must submit a Platform Operation Plan and a deposit established by the SCJ, among other requirements.

In regards to advertising, only licensed companies will be able to share their content in the media, and the latter must verify the existence of a license or they may face fines by the SCJ.