Chile’s newly elected government has introduced a project to legalise online gambling in the country in an effort to generate additional tax revenue.

At present, all gambling is illegal in Chile unless expressly authorised by law – a position which is currently afforded to the country’s two regulated lottery operators, as well as racetracks across the region and its 21 land-based casinos.

However, it is estimated that some 900 gambling websites already offer online gambling in the jurisdiction, and their presence in Chile is well known due to a series of high-profile football sponsorships from firms including Betsson, Betway and Betano.

When announcing its sponsorship of Chilean club Colo Colo earlier this year, Betsson described the deal as “another major milestone in Betsson’s expansion plan in South America.”

Chile first introduced an initiative to regulate online gaming last year, but the project is only now beginning to see the light of day.

Online gambling is estimated to be worth around $150m annually in Chile, and the government intends to use that revenue to collect taxes worth some $55m, according to Treasury undersecretary Alejandro Weber.

The law seeks to make renewable online gambling licences available for a period of five years, with temporary, non-renewable licences lasting six months also available.

Licences will allow for the operation of any betting or gaming product with the exception of lotteries, which are currently operated under a monopoly model by the state-owned Polla Chilena and privately-owned Loteria de Concepcion.

Licensees must be incorporated in Chile and report the origin of funds used to operate their business, details on shareholders and financial beneficiaries and report any suspicious activity.

The market will be overseen by the Superintendencia de Casinos de Juego (SCJ), which will be renamed the Superintendencia de Casinos, Apuestas y Juegos de Azar (Superintendence of Casinos, Betting and Games of Chance).

In addition to a tax rate set at 20% of operator gross income, licensees will also be required to contribute 1,000 UTMs (Monthly Tax Units) per year. This changeable tax unit is determined by law and updated monthly according to the consumer price index. Temporary licensees will be charged 100 UTMs.

Operators offering sports betting will also be required to deliver a further 2% of annual gross income to national sports federations, while all operators will be required to spend at least 1% of annual gross income on “actions aimed at promoting the development of responsible gaming.”

Finally, all customer winnings will be subject to a 15% tax, which will be claimed when money is withdrawn from gaming accounts.