Study Estimates Chile’s Online Gambling Market Generated CLP 431.5 Billion in Revenue During 2025
The Center for Public Studies (CEP) recently released a study projecting that the gross gambling revenue (GGR) achieved by the Chilean online gambling market will reach an estimated CLP 431.489 billion (around US$450 million) in 2025. According to the report, the country’s regulatory landscape has been unable to keep up with the quick growth of digital gambling sites.
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They observed that the gambling framework in Chile was developed around land-based gambling and the territorial approach to licensing and regulation. However, the advent of online platforms has much altered the market.
The country has a mismatch between the historical approach to regulating gambling and the current online approach: while the online approach is borderless, highly technologically adaptable, with lots of advertising and direct access to consumers, the Chilean approach relies on exceptional authorizations, on-site supervision, and territorial limitations.
Online Gambling Represents a Significant Share of the Market
The CEP study estimates that the regulated gambling market in Chile will have gross gaming revenue of CLP 787.281 billion in 2025 and will contribute CLP 148.712 billion in tax revenue on gambling activities, apart from VAT and corporate income taxes. Land-based casinos still account for about 70% of the regulated market.
By contrast, researchers estimate that CLP 431.489 billion were won through illegal online gambling in the same period, which is equivalent to about 35% of the amounts that were won in the regulated sector. The report projects that, under the assumption of a 20% tax rate on gross gaming receipts, CLP 86.298 billion was estimated to be the potential forgone tax revenue in 2025.
The forecast is also fairly close to the Chilean government’s previous assumption in the budget that the sector will generate CLP 84.090 billion in annual tax revenues during the negotiations of a bill to establish a general regulatory framework for online betting operators.
This alignment, the report said, “constitutes an external validation of the order of magnitude obtained through an independent methodology.”
Researchers Urge Caution When Interpreting the Estimates
The CEP used an indirect estimation model that assumed a historical trend of the regulated gambling market in Chile for the period 2013-2018.
The scientists stressed that these should not be viewed as exact measurements.
“It is important to note that those figures are to be taken with a pinch of salt; the gap doesn’t measure the online market on its own, but an estimate based on the path of the regulated market if it had not been interrupted by the pandemic. There are other factors that may have affected the outcome too, such as shifts in consumer behaviour, a lasting impact of the pandemic, slower growth in some categories, or a transformation in the land-based portion of the market.”
The methodology does not actually identify the size of the online market, but the fact that the gap has remained despite the reopening of physical venues and is similar to the growth of online gambling indicates that a significant part of the gambling activity may have shifted to unauthorized operators.
The estimate isn’t meant as an exact amount of the economic and fiscal burden, but rather an order of magnitude.
Regulatory Challenges Extend Beyond Tax Collection
The report, beyond providing a market size estimate, also states that online gambling has gone beyond a niche phenomenon and is now a major economic sector, which works largely outside the current regulatory framework in Chile.
The researchers say the nation’s laws are still geared towards the traditional casinos, racetracks and lottery operators, making it difficult to effectively monitor electronic platforms.
The lack of regulations specifically developed for the online and transnational market has hindered supervision, taxation and consumer protection in the casino sector, lotteries and racetracks in Chile, while online gaming continues to grow in market share.
The report goes beyond the loss of tax revenue and also identifies a range of areas which are still facing important regulatory gaps, including consumer protection, anti-money laundering controls, sports integrity and responsible gambling.
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Source: SBC Noticias
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