Incomplete Gambling Bill on the Agenda of the Chilean Senate: Details and Prospects

The Chilean Senate will debate the content and form of the proposed Federal Gambling Law (035/2022), which aims to revise outdated laws regarding gambling in the Andean country.

Despite unresolved differences, Chile’s Chamber of Deputies this week passed the bill with a majority of 97 votes in favor and 28 against.

The bill will now move to the Senate for federal review. Ministers in the upper house will decide whether the proposed law meets its main goal: “creating a competitive environment for online gambling, increasing tax revenue for the government and protecting the interests of national consumers”.

By the end of 2022, the government has instructed the relevant authorities to submit proposals to update the Gambling Legislation in Chile, which until then maintained a monopoly structure limited to the activities of three companies: Loteria Concepción, Polla Chilena (organization of football pools) and Teletrak Chile (pari-mutuel horse racing).

The Ministry of Finance has put forward a proposal to introduce an “industry” tax of 20% on gross income from online gambling. In addition, operators will be required to allocate 2% of their revenues to support Chilean sports and 1% to responsible gaming programs approved by the relevant authorities.

The ministry recommended levying an annual fee of approximately 1,000 UTM ($73,000) on licensed online gambling providers. An assessment by the Chilean Financial Markets Commission (CMF) found that these measures could generate an additional $50 million to support sports and public services.

Subsequently, the Economic Commission of the Chamber of Deputies reviewed the legislation and introduced 15 new articles establishing a legal basis for online gambling and sports betting, which were not previously defined in the Chilean constitution.

The bill adopted by the Chamber of Deputies still has restrictions on several technical aspects and regulatory requirements necessary to launch this market.

In September, the Supreme Court reaffirmed its position by upholding a lawsuit by state-owned Polla Chilena, which had insisted that Chilean authorities treat online gambling as illegal and monitor it until its regulatory status is established.

The Supreme Court, in its proposed legislation, established a 12-month restriction period for gray market participants to protect state-owned enterprises during regulatory changes.

This decision further intensified discussions between the Chilean Football Federation (ANFP) and the Ministry of Justice regarding the legality of online gambling sponsorship. This issue remains unresolved because the ANFP has not accepted the terms of the Chilean sports fairness bill.
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