The Chilean government is watching the rapid expansion of the country’s online wagering market with an eye toward regulating and taxing it.
Currently the market is worth about $170 million and growing. The Chilean Executive Branch is discussing legislation with lawmakers that includes a tax rate of about 15 percent. Online gaming currently operates outside the law, but very much in the public eye as gaming operators are frequent sponsors of soccer teams.
The online gaming operators Betano, Betsson, Coolbet and Latamwin complain higher taxation rates could both harm revenues and make it difficult to collect taxes. Government officials have estimated it could collect $55 million annually in taxes.
The government is under pressure to act. Chilean casino operators have filed lawsuits against online betting sites, complaining that they don’t pay taxes while the land-based casinos do.
An attorney representing the online gaming operators, Carlos Baeza, comments “We want a regulation now.”
He added, “All this discussion and points that are in some way being questioned are resolved through good regulation, and we believe that the Government’s project is indeed a good project, that it is duly prepared and contains all the necessary elements and we are going to push to that this project becomes law.”
Baeza added, “The issue of the tax structure that the project raises in general may have different opinions, but in general it seems to us that it is a fairly sensible structure. However, there are some issues that are a bit complicated and that I think are precisely against the Government’s objectives, as is the case of collection, precisely with the user tax, where the bill establishes a rate of 15% as a substitute to income tax, and that we believe that this tax can be a bit complicated.”
Baeza’s clients object to being called “illicit” operators because they operate outside of the country and are not regulated. “I think the right thing to do is to clarify that in the case of companies that have residence and domicile outside of Chile and that provide these services and that are regulated in their countries of origin, there is no illegality in that.”
His clients support regulation that would allow his clients to operate inside Chile without punishing them for being foreign based.
