iGaming Comes to Chile
It looks like Chile will soon have its own online gaming regulation, in line with several other LATAM countries that are interested in expanding their gambling offerings. The federal government of Chile has now made public a bill that was initially announced in 2021. The recently released legislation proposes a path forward for regulating online gaming in the country.
Chile has introduced a bill to legalize and regulate online gaming. ©Markus Spiske/Unsplash
How will online gaming be taxed in Chile?
Though Chile’s iGaming bill will still need to be ratified, it outlines a detailed plan for regulating online gambling going forward. Part of this deals with taxation. At the moment, the plan is for online casino and sports betting providers to be taxed at 20% of income. On the other hand, players would be subject to a 15% tax on winnings.
The bill, which has been in discussion for some time, also included calculations of possible earnings for the government over the next one to five fiscal years. It is estimated that nearly $10 million USD would be collected in the first year of regulation, which could jump to $48 million USD yearly after five years. It is estimated that the online gaming industry is worth between $130 million and $170 million USD per year at the moment. There are already 900 websites available to Chileans for accessing online games, which are not regulated.
Online sportsbooks are also included in the legislation. Operators will be asked to contribute 2% of annual gross income to a sport they provide bets for. If that is not possible, that money will go instead to Chile’s Olympic Committee or Paralympic Committee. In turn, those governing sports bodies must put 50% of the money towards club development.
Every general license will cost about $66,850 USD (1,000 UTM) per year for operators. The fee is much less — just 10% — for so-called “special licenses.”
How will this bill affect gaming regulations in Chile?
Today, all legal gaming in Chile is overseen by La Superintendencia de Casinos de Juego (SCJ), or the Superintendency of Gaming Casinos. The SCJ regulated legal gaming like casinos, state lottos, and horse racing. As of now, online games have operated outside of the law and the SCJ’s jurisdiction, but that will change with the bill.
Online gaming platforms will have to earn licenses and permits from the government in order to operate. All bettors must be over 21 years of age. Consumers will also need their own “RUN,” which is an identification pin to create any online gaming account and help verify identities online.
Currently, unregulated online gaming in Chile is one of the most popular forms of gaming entertainment, and a huge draw for sponsorship deals for the country’s sports teams, particularly soccer. While the new regulation may make some of these existing providers nervous, hopefully the legislation will allow existing networks, like Betano, to continue to operate in a legal way.
Changes for Chile’s SCJ
Part of the proposed changes in the 69-page bill concern the SCJ, which oversees legal gaming in Chile but not online gaming so far. iGaming will fall under the SCJ’s jurisdiction, too, but the body will change its name to reflect its new responsibilities. The new name is: the Superintendence of Casinos, Betting and Games of Chance.
This body will deal with enforcing regulations and creating new policies where necessary for online gaming platforms, including casino games. Chile’s Ministry of Finance will be responsible for the creation of a National Responsible Online Gambling Policy, to be enforced by the SCJ. One proposal so far is that operators will contribute 1% of annual gross earnings to the promotion of responsible gaming.
