Online betting platforms: a new legal challenge in Chile

Online betting platforms: a new legal challenge in Chile

One of the types of websites that has become the most popular since the beginning of this decade are online betting platforms that allow their users to place bets on games of chance from the comfort of their couch. Countries have responded to the rise of these web pages with laws trying to regulate them, mainly because they represent a change similar to Uber’s impact on taxis around the world.

in countries like Colombia, Uruguay, Peru anyone Spain The regulations governing online betting platforms have already been discussed and implemented, and the situation in Chile is no different. By Casino InspectorThere are currently around 900 platforms in the country, of which 100 are dedicated exclusively to locals.

“The pandemic was a trigger in this whole process,” he explains. Juan Arayageneral manager Chilean Gaming Casinos Association (ACCJ) and many of these venues at the time “have been closed for over a year,” he adds.

In March, in the last week of Sebastián Piñera’s government, a bill was introduced to regulate online gambling; But the initiative wasn’t discussed in Congress until August. Treasury Undersecretary He wanted the process not to continue as the Executive Power wanted to add some indicators mainly to integrate it into tax reform.

The current situation, then, is that online betting platforms are in a contentious position until the regulation is approved.

On the other side of the coin are state-regulated activities. Law 19,995Although it determines that games of chance are generally prohibited and therefore any action on this line is illegal, it does include some exceptions: racetracks, lotteries—Polla Chilena de Beneficencia—, lottery law, and sweepstakes and casinos.

Araya points out that the latter complies with the required legal standards, unlike online casinos or illegal physical casinos, which are famous slot machines “located in various parts of Chile and have no regulation”.

“As an association, we suggest that the executive signal, because there are many elements here, including the tax issue, because these companies do not pay taxes, there is nothing left in Chile, unlike what is happening with ACCJ casinos that pay 40% of their gross income in taxes,” he says.

The lawyer states that the consequences of this lack of regulation are that users are left unprotected “because there is no legal certainty” as to whether the games available on the platforms work fairly or even if it is possible to win. The same thing happens with the need for regulation to deal with the problems and effects of compulsive gambling, he adds.

“There are elements of public policy that make me wonder why this passive stance of the government,” he guesses.

Location of platforms

“These rules approve of different situations, things known as ‘garitos’, like houses where one can bet, small casinos,” he says. Carlos Baezapartner Carlos Baeza and Cia.On Law 19,995.

Your position as a representative of four online platforms operating in Chile —Bethany (Greek origin), Betsson (Swedish), cool bet (in Estonian) and latamwin (registered in Curacao), “today, without regulation, no Chilean resident company can place bets online.”

Despite this, it states, assures, that there is no express prohibition on such games, and that the regulations used by land-based casinos refer to matters contained in the Criminal Code, which are not included in the description of their behavior, to such sites Web.

He also makes a historical reference and recalls that the regulations penalizing gambling were drafted in 1875, nearly 40 years before the first casino in Chile was allowed to open in 1931. Most such laws are focused on the administration of bets at physical locations and “to be strictly enforced, not by comparison” when dealing with criminal matters.

“Crimes are entrenched behaviors in the Law, nothing like it,” he says. In this sense, he confirms that the only explicit prohibition against online gambling in Chilean law is Article 5 of Law No. 19,995, but in his view this applies only and exclusively to land-based casinos.

What is the position of your clients regarding the proposal aimed at arranging them? The general consensus is that this is a good initiative, “very thorough, unlike what happens in most projects that stem from parliamentary initiatives, where the law-making process is much slower”.

Another reason why we are addressing the issue this way is that the four platforms that Baeza represents comply with the regulations of other jurisdictions where the relevant legislation has been passed, so it is not a problem to comply with the other.

“The companies I represent comply with the certifications and regulations of each country in which we operate and international organizations such as the European Union, so this does not complicate us because we live in a regulated world,” he says.

In publicity matters, the lawyer mentions that his clients sponsor Chilean major league soccer teams, something land-based casinos do as well.

“For example, it O’Higgin Sports Clubs mainly backed by land based casino Monticello Until December 31, 2021, and now its main sponsor, Latam Win,” explains, “betting platforms sponsor 15 of the 16 major league teams. Spanish Union”.

It also draws attention to the fact that the web platforms it represents are certified by an organization such as: International Game Labs (GLI) does the same with land-based casino machines to ensure that they award prizes and that their chances of winning are of a value that meets the international casino standard.

Chief Inspector’s opinion

latter, Rodrigo absintheThe head of the investigation area of ​​the Gaming Casinos Inspectorate makes clear the government’s stance on these online platforms: they are illegal in Chile.

“If you look at the bill that was passed in March 2022, it seems that they are partially illegal. The whole context of the betting regulation shows that you can only trade with an explicit authorization and anything else that works is illegal,” he notes.

And although he states that the websites do not directly violate casino law, he warns that there is a constitutional caution when it comes to gambling and betting in general, since this is really for the physical ones.

He comments, “Article 63 of the Constitution says that this is a matter of law and heavy penalties are imposed on those who run betting houses,” and although he admits that the crime dates back to 1870 and was for physical betting purposes, “We see that it can spread to anything and the government does it this way.” understood”.

What can be distinguished, he explains, is “there are different kinds of platforms, some less illegal than others, some of the largest and international, with licenses from well-regulated countries and possibly preventing the entry of minors, they have a responsible gaming policy, personal data control, but there are others who do not follow any regulations”.

Another element in the discussion, Asenjo says, is that allowing in-person casinos to build is intended to promote tourism in the regions, so casinos cannot be set up in Santiago, which is a factor in their digital analogy. .. they do not interfere.

“The casino tax stays with the municipality and the region where the casino is located, which is an important source of income for some municipalities,” he says.

It guarantees that the Inspectorate wishes to have some important features with regard to the compliance of the future law, such as technological flexibility, clear tax considerations, entry bans, advertising control, the way licenses are delivered, international certificates, betting information. in real time and to ensure they are true, to protect the public’s faith.

playground of the future

In the view of Juan Araya of the ACCJ, it is important that the tourism promotion purpose behind the establishment of casinos in Chile is not lost in the face of any new legislation regarding online betting platforms.

“It should be protected in legislation to establish that it is not lost and completely absorbed by platforms that, at the end of the day, will reside in Santiago and leave taxes only in the capital,” he comments.

In this sense, it is pointed out that when the regulations are published, it will be desirable to implement a measure similar to the one in the Netherlands. coolingf, that is, all companies operating illegally and thus accessing users’ information could not aspire to obtain a license until after a certain period of time.

“They wouldn’t have benefited from acting illegally because they had a market advantage,” he says of the interim measure, adding that a similar solution “would be a very strong signal for the executive to deliver in this country.”

Baeza ensures that the possibility of control that online betting platforms have in terms of traceability and authentication is more complete and greater than land-based casinos.

“Today 95% of transactions in Chile are online, so information management in terms of tracking who is making the transfer and where the money is coming from has reached almost 100%. This does not happen in land-based casinos,” he predicts.

Abenjo adds that future regulation should address the full spectrum of platforms, both outside regulation compliant and closest to compliance, and ban those that have nothing to do with becoming legal or paying taxes.

And he assures that the final challenge once the law comes into force will be the necessary modernization work to streamline websites, given how complex it is. Block IP addresses, payment methods that may appear, and ads that run not only on traditional media but also on social networks.

Against this background, the project stands out Addressing resources for the inspectorate, which means increasing donations and budgets for the purchase of educational and technological resources.

While their visions differ in several respects, both Asenjo and Baeza agree on the greater capacity that online betting platforms offer to gather information.All data remains nominal. According to the former, one way to control this aspect is that Internet providers can use whitelists that allow access and blacklists that block access.

“This happens in most countries where this is regulated,” he explains, but warns that explicit legal permission must be obtained for this to happen, “because it’s part of the network’s vulnerability, but international policies block certain sites that don’t comply with the law.”

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