Posted on: March 9, 2022, 06:04h.
Last updated on: March 9, 2022, 06:04h.
Chile is adding its name to the list of Latin American countries interested in online casinos. Legislation presented this week lays out how the market would look following approval.
The Chilean government introduced a bill on Monday to regulate online gambling. As written, online casino and sportsbook operators would have to pay a tax of 20% of their income. Players would pay 15% of their winnings in taxes. The regulation implies a greater tax collection of US$9.25 million in the first year, a figure that will jump to US$48 million at the end of the first five years.
Chile Takes a Stab at iGaming
In 69 pages, the government, now led by President Gabriel Boric, outlined the new regulations in which online betting platforms will be developed. They would be part of a sector that has been illegal for over a century and that today operates outside the law. Despite its legal status, it has become one of the leading sources of sponsorship deals for sports in the country.
Currently, the regulations establish that only the state-run La Polla Chilena de Beneficencia, the Lottery of Concepción, horse racing and casinos under the aegis of the Superintendency of Gaming Casinos can participate in the gaming industry.
However, the online sector has penetrated Chile strongly. Today, according to data from the government, there are about 900 websites where consumers can access online games.
As a result, it’s an industry that is worth between US$130 million and US$170 million annually. The project estimates that, based on this figure, the annual fiscal collection of this activity could amount to about US$50 million in taxes.
The initiative establishes that only platforms that have a general five-year license or a special permit, valid for 60 days, would be able to offer online gambling within the country. Additionally, the bill establishes 21 as the legal age. It requires consumers to already have a RUN in order to create an online gaming account. The RUN is a unique identification number every resident and non-resident receives.
New Gaming Regulator Included
The platforms will be regulated by the Superintendency of Casinos. This body will now be renamed the Superintendence of Casinos, Betting and Games of Chance. The platforms must maintain a guarantee that supports the money at stake. The regulator will also create policies for dealing with a platform that suddenly stops operating.
The Ministry of Finance will prepare a National Responsible Online Gambling Policy, which will be implemented by the new regulatory body. The operating companies must allocate 1% of their annual gross income to actions aimed at promoting responsible gaming.
In addition to the 20% revenue tax and the 1% responsible gaming levy, sportsbook operators must allocate 2% of their annual gross income to the national governing federation of the sport in question. If there is none, the money will go to the Olympic Committee of Chile or the Chilean Paralympic Committee. The respective federation must allocate at least 50% of this amount for the development of the clubs or affiliates.
There is also a fee of 1,000 UTM per year for each general license in operation. The fee is just 100 UTM if it is a special license. A UTM is a tax unit the government charges in lieu of a VAT. As of last December, the value stood at CLP$54,171, making the respective fees approximately US$66,850 and US$6,685.