"The regulation of online platforms is being thought with the look on physical casinos and that doesn´t work, it doesn´t make sense"

The partner of Bofill Escobar Silva Abogados has vast experience in promoting legislative procedures, such as the criminal procedure reform and the rule of criminal liability of legal entities, among others. On this occasion, the official representative of the betting houses, Carlos Baeza, called him to do a detailed study on the legality of digital gambling operators.

His conclusion?

There is not a problem of illegality as was raised at the beginning, but rather an industry, like transportation or music, that has jumped on the digital wave and opened up new consumer niches. In this interview, Bofill excluded that beyond online gambling operators, in Chile there is a lack of a guide to regularize technology companies in general. In his opinion, the view of the 19th century prevails and "that vision does not work for this business, or for any other".

Why did you decide to enter the debate?

The heart of the problem of online casinos is precisely having legislation. When I was invited to advise the platforms, the idea was to dispel the myths surrounding this industry, especially its illegality. Despite the fact that Carlos Baeza had made his own diagnosis, as a team we decided to carry out a parallel study to assess whether the conclusions were the same. And indeed the result was similar, the only difference was that we added a constitutional edge, with a revision that starts from 1833 onwards.

What are the reasons behind the analysis?

Because the civil code dates from 1865 and the criminal code from 1875, both were dictated under the 1833 constitution, so given that there are concepts that have circulated under those regulatory bodies, we wanted to do an exhaustive review back to find out how they dealt with these issues. However, the problem in this case is more cultural than of any other nature, due to the characteristics of the business of online gaming platforms. During the pandemic, I became obsessed with technological changes and digitization, because we are experiencing these transformations with force, since an acceleration of the changes that were coming was generated. This digital phenomenon produces a total change with respect to the traditional way of doing business. The problem is that we are thinking of regulating online platforms, with the perspective of physical casinos and that does not work, it does not make sense. That 19th century vision doesn't work for this business, or any other.

In what sense?

This industry is highly regulated in other countries, there are different regulatory models, some are more intense than others or require a lot of information, but the common characteristic is that they take care of all the problems that arise as if they were an obstacle to development. If a market does not regulate and take charge of the conflicts, the alternative is not that people go to a physical casino, but that they will go to play in the pirate industry. And the problem is that people are exposed to the lack of responsible gambling, insecurity, money laundering. When you look at what has happened in the business world, you can see an irruption of digitization. For example, until 20 years ago the music industry had creators and record companies that sold their products through vinyl, cassettes or compact discs.

And then the next step was Spotify. Today, who buys music through these supports? Collectors and people who prefer the old-fashioned format. Before the emergence of digital platforms, it was the pirate industry that made the decision to go online, therefore, the alternative before Netflix was not that people went to the movies, but downloaded the movie via torrent, without any royalty payment.

What is your diagnosis about the Law to regularize online casinos that the latest government entered in recent days?

All of us in this team are of the opinion that it is a good project. Now, it lacks discussion and will probably undergo modifications, but as a basic structure it is good because it takes care of problems that arise such as gambling, access by minors, money laundering, certification of machines and games. The project takes care of these obstacles very well and Betano, Betsson, Coolbet and Latamwin are looking for this legislation to be processed so that they can distinguish themselves from pirates. In this context, the platforms seek to show themselves and make a difference, there it conflicts with the parliamentary motion to ban casino advertising. Beyond the matter of soccer, conceptually what this restriction does is invisibility to the legitimate and puts it at the same level as the black market operators.

What is your reading on the view of the current administration on regularization?

I do not know if the government of Gabriel Boric has a defined path on this matter. At first the interpretation was that they wanted to withdraw the project and then, apparently, they decided not to. It is politically understandable that an incoming administration does not want to take over the initiatives of the previous ones, especially when it is presented in recent days. However, once this political problem has been overcome, it seems to me that this is a new industry that can generate additional revenue for the treasury. You have to focus on the peculiarities of this digital world and learn how an online business is regulated. So far the responses in Chile have been very precarious. The only thing that was done was to generate the digital VAT and it was the patch solution. There is a tremendous challenge ahead, as a team we are focused on getting it regulated soon and well, we believe that this regulation (online casinos) will be one of the first of many others to come. We must leave the logic of the 19th century and jump to the 21st century.

What happens if the advertising ban is approved before the regularization?

They are opposing visions. I do not want to be pessimistic on this matter, I imagine that the legislators will realize that the motion of censure is a very bad idea. People are already in the digital world, 70% of the population that gambles does so online and if it is prohibited they will not go to physical casinos, but to pirates. What's the point of covering the sun with a finger, you won't get anywhere. I understand that there are problems that need to be well regulated, but it is not resolved through the prohibition.

Are physical casinos and online casinos direct competitors?

No, they are different markets. I think it is comparing Spotify with a vinyl store, the consumer is different. People who go to casinos go for an experience. There is no real competition between online and physical, because customers are looking for different things. I am convinced that the Ministry of Finance knows that it must regulate it soon, because it will generate income and there is no reason why it should not.