Legal Regulation of eSports in Chile

Introduction

In Chile, the rise of eSports has highlighted significant gaps in the existing legal framework, particularly concerning the classification and regulation of these activities. Unlike traditional sports, eSports involve virtual competitions that can include elements typically associated with gambling, such as entry fees and monetary rewards. This article examines Chile’s gambling laws, their applicability to eSports, and the legal challenges that arise from the current regulatory landscape.

Legal Framework Governing Gambling (and Esports) in Chile

Chile’s legal approach to gambling is primarily governed by the Ley N° 19.995, which establishes the bases for the authorization, functioning, and supervision of casino games. The regulatory body, Superintendencia de Casinos de Juego (SCJ), oversees these activities. However, eSports fall outside the explicit regulatory scope of this law, as they are not conducted in physical venues like casinos and are not solely dependent on chance.

Analysis of Relevant Legal Provisions for eSports in Chile

1. Article 3 of Ley N° 19.995: This article defines games of chance as those where the outcomes are predominantly subject to chance rather than player skill. eSports, where outcomes predominantly depend on players’ skills, strategies, and decision-making, challenge this definition. However, the lack of explicit recognition and differentiation in the law creates a gray area regarding their regulation.
2. Decree No. 2385 on Municipal Revenues: This law grants municipalities the authority to regulate and license certain types of local games. While designed for traditional games, its broad language could theoretically extend to eSports events, adding another layer of complexity for organizers who must navigate local regulations that are not tailored to the digital nature of eSports.
3. Consumer Protection Law (Ley N° 21.081): While not directly regulating gambling or eSports, this law protects consumers against misleading practices. It becomes relevant when considering how eSports are marketed and the clarity provided to participants regarding the nature of their participation and the use of their entry fees.

Challenges Arising from Current Legislation

The primary challenge in the current legal framework is the lack of specific provisions addressing the digital and virtual nature of eSports. This omission leads to several practical issues:

• Uncertainty and Inconsistency: Event organizers and participants face uncertainty about the legality of their activities, potential liabilities, and the applicability of gambling laws.
• Inadequate Consumer Protection: Without clear regulations, consumers may not be adequately informed about their rights or the nature of the events in which they are participating, potentially leading to disputes and dissatisfaction.
• Inhibiting Industry Growth: The legal uncertainty can deter investment and hinder the development of a structured eSports market in Chile, which is crucial for the professionalization and global competitiveness of this sector.

Proposed Solutions for Legislative Reform

To foster a conducive environment for the growth of eSports in Chile, the following legislative reforms could help eSports:

1. Explicit Recognition and Definition: Introduce specific legislation that clearly defines eSports, distinguishing them from gambling activities based on their skill-based nature.
2. Regulatory Framework Development: Develop a tailored regulatory framework that addresses both the digital nature of eSports and the physical venues where events might be held.
3. Stakeholder Engagement: Involve key stakeholders, including gamers, event organizers, legal experts, and consumer protection agencies, in the legislative process to ensure that the regulations are comprehensive and practical.

Conclusion

The legal challenges currently facing the eSports industry in Chile require thoughtful consideration and action from lawmakers. By addressing the gaps in the existing legal framework and introducing clear, tailored legislation, Chile can better support the growth and sustainability of eSports while protecting the interests of all parties involved. Establishing such a legal foundation is essential for Chile to remain competitive and innovative in the global eSports arena.

With material from: La Voz de Chile