Chile’s Online Gambling Debate Intensifies as Senators Propose Ban on Private Operators

Chile’s proposed framework for regulating online gambling is facing competing legislative challenges, with some senators seeking to prohibit private operators entirely while others want to reserve online gambling for the country’s established lottery providers. The competing proposals have intensified uncertainty for operators as lawmakers continue to debate the future of the market.

On 26 October 2026, President José Antonio Kast’s government submitted a 114-page package of amendments to a bill originally introduced in 2022. The legislation is currently undergoing its second constitutional review in the Senate. The government’s proposal seeks to establish a regulated private online gambling market, while amendments submitted by senators would significantly restrict or eliminate private-sector participation.

Under the government’s plan, private operators would be eligible for licences lasting five years and would have to comply with new taxation, advertising and player-protection requirements. The proposed annual licensing fee would be 1,000 monthly tax units, equivalent to approximately US$77,000 at current rates. The tax framework would include 19% VAT on the difference between stakes and winnings, alongside an additional gambling tax of 3%.

The proposed regime would also prohibit advertising and promotional bonuses for online gambling platforms. Operators would be required to introduce default limits on deposits and playing time, alongside measures intended to strengthen consumer protection. Companies that had operated in Chile without a licence during the preceding 12 months would generally be excluded from applying, unless they entered into an authorised transitional arrangement.

The government’s approach therefore seeks to bring private operators into a formal licensing system while imposing additional compliance and financial obligations. However, it faces two alternative proposals that would move the country in a substantially different direction.

Senator Paulina Núñez has proposed restricting online gambling to Chile’s two established lottery operators, Polla Chilena de Beneficencia and Lotería de Concepción. Under her proposal, these operators would not be permitted to expand their offerings by introducing new gambling products. The amendment would also establish criminal penalties for unlicensed operators and introduce permanent website-blocking measures against illegal gambling platforms.

A separate amendment submitted by Senators Diego Ibáñez and Gastón Saavedra seeks to prohibit private online gambling operators altogether. Under this proposal, developing, operating, managing, offering, brokering or advertising online gambling platforms and online casinos in Chile would be prohibited. Companies already registered with Chile’s tax authority could receive a transitional period of up to 24 months to cease operations.

The proposed ban would apply according to where gambling services are offered rather than where a company’s technical infrastructure is located. A platform accepting bets from customers in Chile could therefore fall within the proposed prohibition even if its servers and other infrastructure were based overseas.

Violations could carry prison sentences ranging from six months to three years, together with financial penalties. The proposal would significantly change the position of private operators that currently serve Chilean customers and would replace the proposed licensing approach with a prohibition on their activities.

The Senate approved the underlying bill in principle in August 2025 by 27 votes to three, with five senators abstaining. That vote supported further consideration of a regulatory framework; it did not constitute final approval of the current government amendments or the competing proposals. The latest submissions indicate that the eventual legislative outcome remains unsettled.

The debate is taking place against a backdrop of uncertainty over the legal status of online gambling in Chile. Authorities have taken action against unauthorised platforms, including court-backed website-blocking measures. In September 2026, Chile’s telecommunications regulator, Subtel, reported that 42 betting websites had been ordered blocked. At the same time, 39 offshore platforms had registered with the tax authority under rules requiring foreign digital service providers to pay VAT on transactions in Chile.

The coexistence of website blocking and tax registration has raised questions about how the country’s current framework treats online gambling businesses. Registration for tax purposes does not, by itself, establish that a gambling operator is authorised to provide betting services under gambling law. The proposed legislation is intended to establish a clearer legal structure for licensing, supervision and enforcement.

Industry representatives have argued that the lack of a settled framework creates uncertainty for consumers, the government and operators. The Agrupación de iGaming Responsable has welcomed the government’s move towards regulation but expressed concern that prohibiting advertising and promotional bonuses could make it more difficult for licensed businesses to compete with unlicensed websites.

The competing proposals also raise questions about enforcement. A prohibition could be accompanied by website blocking, payment restrictions and criminal penalties, but its practical effectiveness would depend on the ability of authorities to identify operators, restrict access and prevent transactions. Supporters of regulation argue that a licensing system would provide a basis for imposing standards, monitoring activity and collecting gambling-specific taxes.

For operators, the implications of the legislative process are substantial. A five-year licensing model would provide a formal route to market, subject to the proposed eligibility requirements and operating conditions. A lottery-only system would exclude most private providers from offering online gambling, while an outright prohibition would require private operators to withdraw from the market within the applicable transition period.

The proposals would also affect related businesses, including payment providers, advertising intermediaries and technology companies supporting online gambling platforms. The extent of any obligations would depend on the final legislative text, including the definitions of prohibited activity and the enforcement measures adopted.

The amendments will be considered by the relevant Senate committees as the legislative process continues. Until lawmakers reach a decision, none of the competing proposals should be treated as the final regulatory framework.

Chile’s debate reflects a fundamental choice between licensing private operators under a regulated system, restricting online gambling to existing lottery providers, or prohibiting private online gambling altogether. The outcome will determine how the market is structured, which businesses may participate and how authorities seek to protect consumers and enforce gambling restrictions.

By fLEXI tEAM