Chile government projects more than US$100m in first-year online betting tax revenue
Regulation2 min read
In brief
- Chile's government estimates its online betting bill would raise over $100m in year one and $133m after five years.
- The bill sets a 3% specific tax with no VAT or PPM deductions, a 22% effective rate with VAT.
- A 1% responsible-gambling contribution and a full advertising ban are proposed, with a one-year transition for existing contracts.
Chile's finance undersecretary, Sebastián Vallebona, said the government's bill to regulate online betting would raise more than $100m in its first year, rising to $133m after five years of application. He gave the estimate while presenting the proposal to the Senate's economy committee, which is discussing the government's bill.
Under the proposal, a 3% specific tax would apply without deductions for VAT or monthly provisional payments (PPM). Added to VAT, the effective rate would reach 22%. A 1% responsible-gambling contribution would be calculated on gross revenue after VAT and PPM are deducted, and the Treasury would make a direct contribution of 60,000 UTM (monthly tax units) over three years to a new fund for the prevention and treatment of problem gambling. An annual fee of 1,000 UTM per licence would be maintained.
Vallebona said the change did not amount to a tax cut from 20% to 3% because the two figures use different calculation bases. He said the new structure would allow predictable taxation that is easy to supervise. The projection exceeds the $84m a year estimated under the previous bill, he said.
The previous bill applied VAT to online betting as a digital entertainment service and allowed operators to recover tax credits on goods and services they bought. Like land-based casinos, online games would have faced a 20% specific tax, with VAT and PPM payments deductible, plus an additional 1% rate for responsible gambling whose amounts could also be deducted.
The new bill also proposes a full ban on online betting advertising, backed by administrative and criminal sanctions. Vallebona said the previous bill restricted advertising, while the new text moves to a total prohibition covering all types of platforms and economic sectors. A transitional rule would let platforms that opt for regularisation keep advertising for one year, provided it is based on a contract signed before the law is published.
Vallebona said the changes also aim to strengthen user identity checks, allowing permanent and continuous control.