The Chilean government expects to reap $84bn (£64.3m/€74.6m) annually from a regulated betting market, which has secured the approval of the country’s Senate.

Senators approved the bill launching a regulated online betting and gaming market in Chile with 27 votes against three, while five Senators abstained from the vote.

Both the government and legislators want to take down a huge grey market which has proliferated in the country. The Senate asserts that over five million Chileans use this market, which in turn generated more than US$3.1bn in 2024 (£2.3bn/€2.6bn).

The Ministry of Finance wants to see this market come under greater government control and scrutiny so that the revenue generated can be legally taxed. On top of this, the government is also concerned about the state of player protection, or lack thereof, in the unregulated market.

Hedi Berner, the Finance Undersecretary of President Gabriel Boric‘s government, argued that there needs to be more legislative and executive oversight of the gambling sector to prevent money laundering and ensure taxation and traceability of funds.

Chile joins the regulation wave

Latin America’s betting industry has seen a surge in interest in recent years, largely driven by the hype around the launch of the Brazilian market. This national online betting space hit the ground on 1 January this year, and has caught the attention of countless local and international companies.

Other notable markets across the Latin America region include Peru, Colombia, Argentina and Mexico, among others. Chile, on the other hand, has remained quite strict, with the industry awaiting an easing of legal restrictions for some time.

Chilean law makes games of chance illegal. In most countries, the term ‘games of chance’ tends to cover online casino games like slots and roulette, while sports betting and sometimes other casino games like poker are considered ‘games of skill’ to the knowledge and/or playing abilities involved.

The country’s Supreme Court took the definition a step further in 2023, however, by declaring sports betting a game of chance, effectively making it illegal. The government has since become concerned about the extent this grey market has grown over the following two years, and about the number of young people including children who participate in it.

The framework to regulate Chile’s market comes just over two years after it first began its long legal journey – passing the Chamber of Deputies on 12 May 2023. To reach where it is now, the legislation had to also be approved by the Senate’s Economic and Finance Committees.

Under the new law, the current regulator of gaming in Chile, the Superintendency of Gaming Casinos (SCJ), will become a new agency with a wider remit – the Superintendency of Casinos, Betting, and Games of Chance.

Undersecretary Berner explained to Senators that the bill “creates a National Responsible Gambling Policy, limits advertising, prohibits betting by those who influence sports results, and allocates part of the revenue to sports funding. It also establishes access restrictions and criminal sanctions for unauthorized platforms.”

Key points for newcomers

The re-regulation of Chile’s betting space presents yet another opportunity for various betting operators like Flutter Entertainment and Entain, who have been chasing leads in Brazil.

Meanwhile, others like bet365 have been finding success in Argentina, while Betsson is taking a broader approach to Spanish-language markets.

As always, there are some important caveats to the legislation operators should keep in mind. For one thing, the bill will introduce a mandatory National Responsible Gambling Policy to curb gambling harm.

Perhaps the biggest consideration is taxation – something that is biting into many operators’ bottom lines in Europe and Latin America already. Gaming tax has been set at 20%, while Chilean firms will also have to pay an annual tax of 2% of gross sports betting revenue to the National Sports Institute, which in part funds Olympic activities.

Betting will be taxed as a digital entertainment service, meaning it will be subject to VAT though this will allow operators to recover tax credits for services they pay for, like advertising and software.

Meanwhile, Mario Marcel, Chile’s Minister of Finance, also shared that the government intends to update the definition of illegal gambling in its ‘Economic Intelligence Project Against Organised Crime’.

The government wants to ensure “that there can be consistency” between its mission to disrupt and prosecute illegal gambling and its new mission to regulate and encourage a competitive legal betting and gaming market, Marcel explained.

Following approval by the Senate, the bill will now face further scrutiny from the Joint committees of Economy and Finance, with the deadline for suggestions set at 29 September at 12pm, but it seems that Chile is well on its way to a regulated betting future.

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