Chile: former minister says SII’s tax plan for online betting platforms is “absolutely illegal”

Chile’s Internal Revenue Service (SII) is trying to set up a registration-and-tax collection system for online betting platforms, and former Security and Justice Minister Luis Cordero says that move has no legal basis. For PSPs, the interesting part is not the rhetoric; it is the explicit mention of payment gateways as a way to block the platforms’ financial flows.

1. Speaking as private counsel for the Association of Casino Gaming and the salmon industry, Cordero said the SII does not have the authority to create, through an administrative resolution, a mechanism that would put online betting platforms on the same footing as regulated casinos.
2. “The decision is absolutely illegal,” he said, arguing that the tax authority has gone beyond its powers by creating a registration and taxation procedure for an activity whose legal status is still being disputed.
3. The Association of Casino Gaming has already filed a request for reconsideration with Chile’s Comptroller General to challenge the SII’s approach. Cordero said that if the Treasury keeps its position or the Comptroller declines to rule because the matter is already before the courts, the dispute could move directly into litigation.
4. Cordero also said he will handle the industry group’s litigation strategy and supported the idea of blocking the platforms’ financial flows through payment gateways. For PSPs and acquirers, that is the operational point to watch: the fight is not just about tax treatment, but about whether payment rails become the enforcement tool.
5. He added that the situation creates an institutional contradiction, because the SII is trying to register these sites for tax purposes while judicial decisions have ordered them blocked. In his view, that leaves the state with conflicting signals on whether the activity can be treated as taxable while its operation remains under legal challenge.