Chile casinos slam tax plan for illegal betting operators

Chile’s casino industry has intensified its criticism of the country’s decision to collect VAT from offshore betting operators, arguing that the policy effectively recognises an activity that remains illegal under current law.

Speaking before the Senate Economy Committee, Chilean Casino Association President Cecilia Valdés described the situation as a “giant contradiction”, questioning how the State can collect taxes from businesses it simultaneously seeks to prosecute.

Valdés argued that any discussion about taxation should come only after lawmakers establish a legal framework for online gambling.

“We must first have a law and then decide how and what to collect,” she told senators.

The comments add to a growing dispute surrounding a recent resolution from Chile’s Internal Revenue Service (SII), which created a mechanism allowing offshore betting operators serving Chilean customers to register and pay VAT.

While tax authorities have repeatedly stressed that the measure does not legalise online gambling, critics say it risks sending the opposite message to consumers and operators.

Valdés also raised concerns about consumer protection, responsible gambling measures and anti-money laundering controls. 

She revealed that the association recently consulted Chile’s Financial Analysis Unit (UAF) and was informed that offshore betting operators would not automatically be subject to suspicious transaction reporting requirements because such obligations must be established through legislation rather than administrative resolutions.

According to Valdés, that creates a gap in oversight for an activity that international organisations, including the Financial Action Task Force (FATF), have identified as potentially vulnerable to money laundering risks.

The casino sector has also questioned the fiscal logic behind the policy, arguing that VAT alone captures only a fraction of the tax revenue that could be generated under a fully regulated market.