Chile's Supreme Court Upholds Regulator's Ruling That an Operator's Machines Are Games of Chance

The Supreme Court has confirmed that the casino regulator was entitled to classify an operator's "skill" machines as games of chance and to discount a laboratory report the operator said proved otherwise. It is one case from the island of Chiloé, but it backs the procedure Chile uses against thousands of machines operating outside its casinos.

• The Third Chamber of Chile's Supreme Court, in case Rol 8.522-2026 decided on 25 September, confirmed a Puerto Montt Court of Appeals ruling that rejected a constitutional protection action by Comercial Cofan E.I.R.L. against the Superintendencia de Casinos de Juego (SCJ)
• The SCJ had classified six games operated by the company in Castro as games of chance in March 2025 and advised the municipality not to renew its commercial licence
• The courts accepted the SCJ's view that a 2024 report by Gaming Laboratories International was a functional software review, not a certification of the machines for Chile, and did not rule out a random number generator
• Outside licensed casinos, games of chance are generally illegal in Chile; an SCJ survey in 2016 counted 33,009 cash-prize machines in 1,327 licensed premises
• Chile's online gambling bill is still in the Senate, which on 23 September opened a new deadline for amendments running to 16 October

A Licence Renewal That Ended in the Supreme Court

The Supreme Court has confirmed the rejection of a protection action (recurso de protección) brought by Comercial Cofan E.I.R.L. against Chile's casino regulator, the Superintendencia de Casinos de Juego (SCJ), over the regulator's classification of the company's machines as games of chance. In its ruling of 25 September in case Rol 8.522-2026, the court's Third Chamber upheld in full the judgment of the Puerto Montt Court of Appeals, according to the legal news service Actualidad Jurídica, which first reported the decision on 28 September.

The dispute began with a routine licence renewal. On 15 February 2024 the Municipality of Castro, on the island of Chiloé, told Comercial Cofan that it needed a report from the SCJ before its commercial licence (patente comercial) could be renewed. The company asked the SCJ to start the classification procedure on 31 July 2024. On 6 March 2025, by Oficio Ordinario 438/2025, the SCJ classified the equipment as machines of chance and recommended that the municipality refrain from renewing the licence. The company's administrative appeal was rejected by Resolución Exenta 535/2025 of 5 June 2025.

The Laboratory Report the Courts Set Aside

Comercial Cofan argued that the regulator had breached the principle of legitimate expectations and its rights to equality before the law, due process and freedom to carry on an economic activity. Its central evidence was a report by Gaming Laboratories International (GLI) from September 2024 which, according to the company, supported its position that the machines contained no element of chance. It asked the court to annul the resolution, reopen the classification and order the SCJ to weigh the report again.

The SCJ answered that its procedure was set out in advance in its own rules, and that the GLI report was not a certification intended to determine the nature of the machines under Chilean law. In rejecting the appeal, the regulator had said the document was a functional review of the software rather than a certification for a specific jurisdiction, that it did not establish unequivocally the absence of a random number generator or other programmed mechanism involving variables the player cannot anticipate or control, and that GLI had examined four games while the SCJ's decision covered six.

The Puerto Montt court found that the SCJ had weighed the report and explained why it did not change the classification, so the decision could not be called arbitrary. It noted that the procedure rests on opinions of the Comptroller General (dictámenes 92.308 of 2016 and 25.712 of 2019) whose validity the Supreme Court had already upheld, in case Rol 19.054-2018. It held that the freedom to carry on an economic activity is subject to the limits the law sets, citing Article 1466 of the Civil Code on unauthorised games of chance, and found no arbitrary difference in treatment. The Supreme Court found that the appeal did not undermine those reasons. The ruling itself could not be retrieved from the judiciary's website, which blocks automated access; this account relies on the summaries published by Actualidad Jurídica and SoloAzar. iGaming Times found no statement on the ruling on the SCJ's website.

The Market the Ruling Touches

In Chile, games of chance are illegal unless a law expressly authorises them, as it does for casinos, horse racing and the state lotteries, the SCJ's head of legal affairs, Manuel Zárate Campos, told municipal officials in 2023. Machines that pay cash prizes are therefore allowed only in licensed casinos, and the parlours that operate them elsewhere under municipal licences for games of "skill and dexterity" (habilidad y destreza) do so on the basis that their machines involve no chance. Since 2017 the SCJ's Circular 83, amended in 2023, has set the procedure by which such machines are classified before a municipality grants or renews a licence.

The scale is large. An SCJ-commissioned survey published in 2016 visited more than 3,000 licensed premises in the 87 most populous municipalities and found cash-prize machines in 1,327 of them, 33,009 machines in total, with the largest concentrations in Estación Central, Curicó and Temuco. In 2018 the Supreme Court rejected an action by FIDEN, an association of electronic gaming machine operators and importers, against the regulator's publication of that survey.

The same courts are doing the work online. Chile's online gambling bill, Boletín 14.838-03, passed the Chamber of Deputies in December 2023 and was approved in general by the Senate on 13 August 2025, by 27 votes to 3 with 5 abstentions, according to the Senate's legislative record. On 23 September 2026 the Senate opened a new period for amendments, to noon on 16 October, in its Economy Committee. Until it passes, the state is acting against online operators through Supreme Court-backed blocking orders won by Lotería de Concepción.

A Laboratory Letter Is Not a Licence

The most useful part of the ruling for the regulator is its treatment of the GLI report. Comercial Cofan's case rested on a technical report from one of the industry's best-known laboratories, and the courts have now accepted that a functional review commissioned by the operator does not bind the SCJ, particularly when it covers fewer games than the regulator examined and does not exclude a random number generator. That sets the evidential bar where the regulator wanted it: an operator must show the absence of chance for the specific machines in question, under Chilean criteria, rather than produce a clean report from a respected laboratory. For testing houses it is a reminder that a jurisdiction-neutral review can be turned against the client who commissioned it.

The Ruling Is Narrow, but It Gives Municipalities Cover

This is one operator, one municipality and six games, and the Supreme Court did not issue a general declaration that all such machines are games of chance. Its value is procedural. It confirms, again, that a municipality may require an SCJ report before renewing a licence, that the SCJ's classification method is lawful, and that a recommendation not to renew survives a constitutional challenge. The enforcement gap is that, as in this case, the SCJ recommends and the municipality decides; closures depend on hundreds of local authorities acting on its reports, and the most recent national count of machines is ten years old.

Chile Is Policing Two Unlicensed Markets Through the Courts

On land, the tool is municipal licensing backed by SCJ reports; online, it is DNS blocking backed by court orders. Neither is a licensing regime for the demand being served, and both are slow compared with the markets they target. The online bill would at least give the state a licensed channel to point players towards and turn the SCJ into a regulator of the online market, a job it does not yet have. The bill is about online platforms; the machines on Chile's streets are a separate problem, and for now the municipal route this ruling endorses is the only one.

The Supreme Court has handed the regulator a clean procedural win. Turning it into fewer machines on Chile's streets depends on municipalities, and on a Congress that has reopened amendments to a bill it first approved in general more than a year ago.