The Supreme Court of Chile has taken a decisive step by ordering internet service providers (ISPs) to block access to unlicensed online gambling sites. This groundbreaking order targets major telecommunications providers in the country, including Claro, Entel, Telefónica, WOM, and VTR, requiring them to shut down any internet traffic directed towards gambling domains operating without local authorization. This move by the highest judicial authority comes after a legal battle initiated by Lotería Concepción, following an earlier dismissal by the Court of Appeals.
The conflict underscores an escalating tension between local gaming entities such as Lotería Concepción, Polla Chilena, known for football betting, and Teletrak, a leader in horse racing, against foreign online gambling operators vying for a share of the Chilean market. Significant international online gambling platforms like Betano, Coolbet, JugaBet, Rojabet, and Betsson have been included in the list of blocked sites. Previously, ISPs argued that such blocking measures would breach the principles of net neutrality, as online gambling remains unregulated in Chile. However, the Supreme Court has made it clear that net neutrality applies solely to legal content, deeming the failure to block unlicensed sites as “illegal and arbitrary.”
The court’s decision places additional pressure on Chilean lawmakers, who have struggled for years to establish a comprehensive framework to regulate online gambling. Since 2022, numerous drafts of a gambling bill have been stuck in the legislative pipeline. Despite some headway made in 2023 with agreements on criminal measures, taxation, and sports integrity, the Chilean Congress’s Senate Economic Committee rejected the proposal due to unresolved issues related to IT licensing, advertising codes, and compensations for municipal operators potentially losing their monopoly.
Adding to the legislative quagmire is a dispute involving the ANFP, Chile’s Football Federation, and the Ministry of Justice regarding football sponsorships secured with foreign operators amid the absence of clear legal guidelines. This situation further complicates the regulatory landscape, creating an urgent need for a structured legal framework.
From an economic perspective, the stakes are high for the Chilean government. The online gambling market is estimated to generate over $150 million annually, yet remains outside of the country’s tax system. The proposed legislation envisages a 20% gross gaming revenue (GGR) tax for licensed operators, coupled with a value-added tax (VAT), leading to an overall tax burden of approximately 28%. This rate would position Chile in the mid-range of global standards for gambling taxation.
Provisions in the draft bill also include targeted allocations: a 1% fee designated for responsible gambling initiatives and a 2% fee on sports betting revenues intended to fund the development of Chilean sports. Regulators argue that formalizing regulations is critical not only for revenue generation but also for mitigating risks associated with unregulated gambling, like money laundering, illicit financing, and potential harm to vulnerable populations.
A significant structural reform proposed in the draft is the evolution of the Superintendence of Casinos (SCJ) into the Superintendence of Casinos, Betting, and Games of Chance. This new body would oversee licensing, ensure compliance, and enforce regulations, aiming to maintain standards of fair play and financial transparency. Consumer protection remains a top priority within the bill, with plans to introduce measures safeguarding younger players, ensuring transparency in financial transactions, and implementing strict responsible gambling controls. By fostering a competitive legal market, the legislature hopes to divert players from unregulated platforms to legitimate operators.
Despite the Supreme Court’s clear directive, the legislative process in Chile continues to face delays. Finance Minister Mario Marcel has repeatedly emphasized that the gambling industry is “operating outside the law, without paying taxes, and presenting significant social risks.” Treasury Undersecretary Heidi Berner has also highlighted the dangers posed by the opaque nature of ownership and financing in the sector, which increases vulnerability to money laundering activities.
Although the Senate resumed discussions in 2025, persistent disagreements, particularly around municipal compensation and advertising, pose a threat to further delay the approval of the bill. As tensions rise, the Supreme Court’s ruling against ISPs adds pressure on lawmakers to establish a viable regulatory framework.
The future of Chile’s gaming reform remains uncertain amidst the nation’s unpredictable political climate. However, the Supreme Court’s intervention has reignited the debate, elevating the matter to the top of the national agenda. Lawmakers and the gaming industry are now at a critical juncture, with the stakes higher than ever as they navigate towards regulatory resolution.
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