The boom in online betting is still under the watchful eye of the authorities. As pointed out by the Ministry of Finance, as well as regulators such as the Superintendency of Gaming Casinos (SCJ), the activity operates outside Chilean law. While the Executive discusses with parliamentarians the project that seeks to regulate online betting, it is estimated that the market moves between US$130 million to US$170 million annually in the country, while its growth continues and its presence as sponsors of soccer teams and in the local championships it increases.
Casino operators have filed lawsuits in recent months against online betting and gambling sites for illegal exploitation and operation. This, while the main detractors of these firms point to a lower tax collection from the treasury as they are not regulated. The Executive estimates that it could collect some US$55 million annually in taxes with these companies.
A situation that some of these companies hope to change. "We want a regulation now," says Carlos Baeza, a lawyer representing the firms Betano, Betsson, Coolbet and Latamwin. "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,” he affirms.
The lawyer points out that his representatives are open to the regulation pointed out by the project that originated in the previous government, whose process is on hold until taxes are introduced for this industry in the tax reform. This, with the objective that both legal bodies are congruent, according to what the Treasury pursues. However, he maintains that there are some elements that could be improved in relation to the initiative that is under discussion in the Economy Commission of the Chamber of Deputies.
Among the points that seek to improve is the single tax, income substitute, for users with a rate of 15%. “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,” he says.
Baeza adds that it could affect the demand for this type of betting offer service, which would impact the collection estimated by the Government, as well as could encourage users to seek alternatives in which they do not have to pay taxes.
Likewise, the lawyer points out that the single tax of 20%, a substitute for VAT, for operating companies on their gross income, which is part of the Executive's proposal, should be reviewed. "Although it seems to us a tax that is also reasonable, but perhaps a little in the structure it would be more desirable if it were VAT rather than a substitute for VAT," he points out. "If the interest is to regulate this industry and generate resources and, ultimately, generate the necessary conditions for companies to establish themselves, that tax should be more than a substitute VAT," he adds.
During the last discussion in the Economy Commission of the Chamber of Deputies, the SCJ stated that measures should be evaluated on these online betting firms before a regulation appears. To this end, they cited the example of the Netherlands, where once the law regulating online gambling was passed, all those who had operated illegally before the regulation were prohibited from operating in the market for a period of almost three years.
In the industry, however, they do not agree with this type of initiative. "It is not reasonable that if the interest is to regulate this industry and attract operators that come to be subject to Chilean rules, they should have to punish those operators," says the lawyer.
“What would have to happen is that transparent, competitive, open and modern regulation be established, allowing large operators to establish themselves and comply with Chilean regulations. It does not seem very sensible to establish a kind of punishment, because today, to the extent that this entertainment offer, which are companies domiciled and resident outside of Chile, is not illegal at all, therefore this offer is not strictly out of the law. Therefore, we do not see what use this supposed blockade could have,” says Baeza.
Source of funds
The darts also point to the fact that these companies operate with headquarters in so-called tax havens. Betano —owned by KaizenGaming and the main sponsor of the Universidad de Chile club— is based in Malta and operates through a license granted and regulated by the Gaming Authority of that country (MGA). Likewise, Betsson —which sponsors the Primera B tournament—, and Coolbet are also governed by the rules of the MGA, while Latamwin operates under the regulation of Curaçao.
The lawyer points out that his representatives do not share the questioning of operations classified as "illicit" that are offered in the market as they are not regulated. "The fact that this generic accusation is made regarding illegality in the industry we consider to be inaccurate statements," he says. "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," he emphasizes.
Regarding the doubts about the origin of the funds of these operators, Baeza indicates that the regulation that is being processed in Congress will allow these questions to be cleared up, since "it makes it possible to have that control and clarity and awareness of who is operating." In this sense, he adds that "the fact of establishing a regulation and establishing a series of clear and objective norms allows to avoid risks and in the case of the companies that I represent (Betano, Coolbet, Latamwin and Betsson), they are companies that are registered in other jurisdictions," he says.
Source: El Mercurio (Chile)
