The Polla Chilena de Beneficencia filed a lawsuit for money laundering against payment processing companies, in a new legal offensive against online gaming platforms operating in the country. The legal action is specifically directed against six legal representatives of the companies that facilitate financial transactions on betting websites.
Read also: Tribunal of Brazil orders mandatory warnings about addiction risks on betting platforms
This legal strategy marks a shift in the approach of authorities in Chile to combat unregulated online gambling. Instead of trying to directly prosecute digital casino operators, which are often based in foreign jurisdictions, the lawsuit targets the financial intermediaries that enable transactions within Chilean territory.
The decision by the charitable institution represents a significant precedent in Latin America, where various countries face similar challenges in regulating and controlling the rapid growth of online gaming platforms operating without local licenses.
Legal Arguments of the Filed Lawsuit
In the complaint, lawyer Isidro Solís explained that the state betting entity holds a near legal monopoly on betting in Chile, with the only exceptions being established casinos, the Concepción Lottery, and authorized racetracks. This restrictive legal framework makes the operation of any online gaming platform without specific authorization illegal.
Despite this legal situation, the lawyer emphasized that the state institution “has had to tolerate the existence of a series of manifestly illegal gambling games that engage in criminally defined conduct. However, because the ownership of these illegal betting houses is held by natural and legal persons rarely established in Chile, commonly from tax havens, their civil and criminal prosecution is extraordinarily difficult, allowing them to act with absolute impunity.”
The strategy of directing legal action against payment processors aims to cut off the financial flow that sustains the operation of these sites. According to the lawsuit’s argument, without the ability to process transactions in Chilean pesos and connect to the local banking system, international platforms would not be able to operate effectively in the Chilean market.
Context of the State Monopoly on Gambling in Chile
Chile maintains one of the most restrictive gambling regimes in Latin America. The state monopoly exercised by the charitable entity dates back decades and is based on the idea that gambling surpluses should be allocated to social causes and not private profit.
Read also: South Dakota moves toward online sports betting with state Senate approval
This model contrasts with the regional trend towards the regulation and licensing of private operators, as has occurred in countries like Colombia, Argentina, and Brazil. However, Chilean authorities have maintained the stance that opening the market could lead to problems of gambling addiction and criminality.
The resistance to modifying the legal framework has created a paradoxical situation: while Chilean law prohibits the operation of private online casinos, thousands of citizens access these platforms daily via the internet. The practical impossibility of blocking access to international websites has rendered the legal prohibition largely ineffective.
Debates on Online Gambling Regulation in Chile
The case presented by the charitable institution reopens the debate on the need to update Chilean legislation on gambling. Various sectors argue that the state monopoly is anachronistic in the digital age and that modern regulation would allow for the capture of currently lost tax revenues.
Proponents of regulation argue that a licensing system for private operators, similar to that implemented in other Latin American countries, would generate significant tax revenues and allow for better control over the activity. Furthermore, they point out that regulation would facilitate the implementation of responsible gambling and consumer protection measures.
On the other hand, those who support maintaining the state monopoly argue that opening the market could normalize betting and increase gambling addiction problems. They also argue that the current model ensures that generated resources are effectively allocated to social causes.
Read also: Colombia studies reform of gambling tax to finance climate emergency
