Chile orders telecoms to block 42 online betting sites as casinos back enforcement and question tax treatment

Chile’s Subtel has told the country’s main telecom operators to block 42 online betting sites within 48 hours, following a Supreme Court ruling against the transmission and promotion of illegal gambling. For PSPs and operators, the useful part is not the headline block itself, but the split it exposes between enforcement, taxation, and the still-unsettled status of online betting in Chile.

1. Subtel ordered Entel, Movistar, Claro, GTD, WOM and VTR to block 42 sites linked, among others, to Betsson, Coolbet, 1xBet and Betano. The instruction was issued to comply with a Supreme Court ruling that prohibits the transmission and promotion of illegal gambling.
2. Cecilia Valdés, executive president of the Asociación Chilena de Casinos y Juegos, said the move is a step in the right direction and should continue while unregulated platforms keep offering services in Chile. Her point, though, was that blocking domains is only a partial fix and does not solve the broader problem of illegal online betting.
3. Valdés also criticized the Internal Revenue Service, the SII, for allowing the same platforms to pay IVA digital (digital VAT). That is the awkward bit for the market: Subtel is blocking sites on one hand, while the tax authority has set up a mechanism for those operators to pay tax on the other.
4. According to Valdés, online operators also continue advertising in Chile without facing the same monitoring and control mechanisms that apply to the regulated casino industry. For regulated operators, that usually turns into a familiar complaint: the cost of compliance is not shared equally across the market.
5. The Asociación Chilena de Plataformas de Apuestas en Línea rejected the block, saying it goes beyond what the courts ordered. The group said some of the domains included were not part of the protection action that led to the ruling and were not covered by the sentence. It also said at least 25 operators made their first digital VAT payment last month, which it presented as evidence that they are willing to meet tax obligations in Chile.

The underlying issue remains the same: online betting in Chile does not have a specific regulatory framework, yet the business is already being treated in pieces by different state bodies. Subtel is enforcing a block, the SII is collecting tax, and operators are arguing over which parts of the market are actually covered by the court decision. That is not a stable operating environment for PSPs, acquiring banks, or anyone trying to decide whether to support or exit the vertical.