• Chile’s Supreme Court has ordered all major internet service providers ( ISPs) in the country to block access to unlicensed online gambling websites in a landmark ruling.
• The decision is a major victory for Chile’s traditional lottery monopolies, such as Lotería Concepción, which brought the legal action against major international brands including Betano and Betsson.
• The ruling comes as Chile’s new Gambling Bill, a piece of legislation designed to create a modern licensing system for online gambling, has stalled in the Senate and effectively returned to “ground zero.”
• The court rejected the ISPs’ “net neutrality” defence, ruling that this protection only applies to legal content and that unlicensed online gambling is not expressly permitted by Chilean law.
• The ruling creates a highly uncertain and hostile environment for operators in Chile, with the judiciary now enforcing a crackdown in the absence of a clear legislative framework for regulation.

A Judicial Crackdown Amidst a Legislative Vacuum

In a dramatic development for the Latin American iGaming market, Chile’s Supreme Court has ordered the country’s largest telecommunication firms to block all traffic to unlicensed online gambling websites. The ruling is a major judicial intervention that effectively initiates a nationwide crackdown on the black market at a time when the country’s own legislative efforts to regulate the sector have stalled.

The direct order applies to all major ISPs, including Claro, Entel, and Telefónica. They have been provided with a list of domains to terminate, which includes high-profile international sports betting brands such as Betano, Betsson, Coolbet, and Rojabet.

The Legislative Failure: A Bill Back at ‘Ground Zero’

The Supreme Court’s decisive action comes amidst a period of deep political and legislative gridlock. A comprehensive new Gambling Bill, which has been under debate since 2022 and aims to create a modern, regulated market for online gambling, has effectively been sent back to “ground zero.”

Earlier this year, the Senate’s Economic Committee rejected a move to fast-track the legislation, arguing that it was incomplete. The committee cited a number of critical unresolved issues, including rules on advertising and a framework for compensating the existing lottery monopolies, such as Lotería Concepción, which will lose their privileged status under a new regime. This legislative failure has created a regulatory vacuum that the judiciary has now decisively filled.

The Court’s Hardline Ruling

The case was brought to the Supreme Court on appeal by Lotería Concepción, one of the municipal monopolies, after a lower court had initially rejected its demand to force ISP blocking. The ISPs had argued that as neutral carriers, they were not obligated to restrict access.

However, the Supreme Court overturned the lower court’s decision, rejecting the “net neutrality” defence. The court’s key finding was a powerful one: “ While there is no direct prohibition on online gambling, it is only legal if expressly licensed.” Since the international operators hold no such Chilean licence, their activity was deemed illegal, and the ISPs were therefore ordered to block them.

A Market in Limbo

The Supreme Court ruling has thrown the Chile gambling market into a state of deep uncertainty. The country’s legislators have so far failed to create a modern, workable framework for regulation, and now the judiciary, at the behest of the old monopolies, is enforcing a blunt and widespread ISP blocking regime. For international operators, the path to a stable, regulated market in Chile is now more complicated than ever, as they are simultaneously being treated as illegal operators by the courts while the very bill that could make them legal is stuck in political gridlock.