Chile’s online gambling roadmap bogged down by tax concerns

Progress on Chile launching its online gambling marketplace has been dampened as political conflicts surface related to outstanding tax issues. 

At the start of the year, Chile’s Ministry of Finance had agreed to finalise a Gambling Bill that would be voted on by the end of the year, seeking to launch a federally regulated online gambling regime by 2023. 

The Ministry had alerted government agencies to update and formalise further legislation on compliance duties, advertising and welfare to support the Gambling Bill’s ascension into law – policy requirements needed to safeguard Chile’s soon-to-be reformed gambling marketplace.

Chile’s National Congress supported the Gambling Bill’s passage, as the Ministry of Finance indicated that it targeted collecting $55m in taxes per year and shutting down a black market of 900 unlicensed websites.

Early developments saw the Ministry confident of achieving its timetable, as it published the licensing criteria and tax framework for the Gambling Bill in March.

The Ministry proposed that foreign and domestic operators could apply for a fixed five-year licence, priced at a ‘Chilean Unit Amount’ of 1000 UTMs or 100 UTMs per six months.   

Meanwhile, it recommended that licensed operators be subject to a 20% gross income tax that would replace national VAT charges. 

Publishing its plans, the Ministry believed that it had cleared the tricky hurdle of settling the market’s tax affairs. However, this week an Economic Commission for Chile’s Chamber of Deputies interjected that a review was necessary on proposed taxes.

The Chamber cited that it had heard the concerns of policy stakeholders – Superintendent of Gambling Casinos Vivien Villagrán, the Undersecretary of Finance Claudia Sanhueza and the head of the Policy Unit Rodrigo Ajenjo

A review was deemed necessary as the Ministry had been judged to have presented an insufficient tax framework for Chile to launch its online gambling marketplace.

Points of conflict saw critics argue that the Ministry had failed to explain how Chile’s local and commercial taxes would be applied to international operators, who should be subject to equal tax terms as domestic incumbents.

Policy stakeholder Claudia Sanhueza underlined her support for the Gambling Bill but stated: “that a diagnosis of the tax framework had demonstrated visible flaws.”  

Chilean Media reported that the Chamber of Deputies had instructed the Ministry of Finance to present an updated tax framework to be reviewed during the fourth quarter of the year and that must address local tax concerns. 

Chile enters a make-or-break period to launch its online gambling marketplace, as the National Congress continues to wait on further legislation related to advertising and welfare policies approved by the Chamber of Deputies.

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