New Polla Chilena legal challenge could add further delay to Chile’s online gambling reforms

The gambling operator has filed a lawsuit against Chilean telecommunications companies.

Chile.- Plans to launch a regulated online gambling market in Chile this year are looking increasingly doubtful. The state-controlled football pools operator Polla Chilena has now filed a lawsuit suing telecom firms and internet service providers for providing access to unlicensed online gambling operators in the current grey market environment.

In the Supreme Court suit, Polla Chilena is demanding CLP 2.70bn (€250m) in compensation and damages from Entel, Claro, Telefónica, GTD Manquehue, VTR and Wom. It notes that late last year, the court had ruled that online gambling should be considered illegal pending advances in legislation and had ordered ISPs to block internet access to unlicensed gambling sites.

Polla Chilena says telecommunications companies have failed to act on that order, breaching Chilean legislation and directly contravening the Supreme Court ruling. WOM has refuted the claims, stating that Polla Chilena has already tried to “claim an unjust enrichment”. It notes that until last year’s ruling there had been no order to block online gambling.

Operators have accused Polla Chilena of lodging cases to delay the country’s planned gambling reforms, which would end the three-party monopoly of Polla Chilena, Loteria Concepción and Teletrak Chile. The monopoly operators want some form of exclusivity to protect their business from competition.

Legislators had already agreed on a licensing framework for regulated online gambling in Chile with a 20 per cent tax on gross income. However, the bill stalled in the Senate Economy Committee last year while awaiting submissions from other departments regarding technical requirements, penalties and legal definitions.

The Supreme Court ordered that the new legislation include a 12-month cooling-off period for operators that have operated in the grey market. Overseas operators such as Betano and Betsson argue that online betting is not explicitly prohibited under Chilean law, but the regulator, the SCJ, is of the view that without explicit legal regulation, the offer is illegal.