Chile permits horse-race and casino gambling as well as lottery games. The Loteria de Concepcion is the oldest lottery still operating. Begun in 1921, it devotes its profits to several charities, including the Red Cross and the Universidad de Concepcion.
The southernmost country on the South American continent, Chile has a population of 11.1 million on 292,258 square miles of land. The country is a strip of land 2,650 miles long and no wider than 225 miles. It is nestled between the Pacific Ocean and the high Andes. A variety of climates and terrain appeals to all categories of tourists. Desert beaches, Mediterranean breezes, magnificent glaciers, ski resorts, and mountain grandeur welcome the visitors. Still the isolated geography restricts the country’s ability to utilize its gambling facilities as a means of attracting outside revenues.
Vina del Mar Casino, the largest casino in Chile
The struggle for Chilean national independence from Spain, led by Bernardo O’Higgins, lasted for many years during the first decades of the nineteenth century. When the local forces emerged with political control, they sought to deal severely with the sinful acts that were remnants of the days of Spanish colonial rule. The “sin” of gambling was high on the “hit list.” An 1812 law proclaimed all games to be illegal. The law stated that gambling “compromised, demoralized, prostituted, and ruined” civilian members of society by corrupting the innocent. Gaming was a “genuine crime” and a “detestable occupation”. An 1818 decree by the liberator O’Higgins saw gambling as the “worst scandal”. Cafe owners were subject to fines for permitting games in their establishments. Another decree in 1819 labeled gaming “repulsive” and promised to punish violators of the prohibition to “the full severity of the law” (Cabot et al. 1999, 287–289).
Yet, as the days of independence unfolded, Chilean lawmakers were aware they could not fully suppress old habits from colonial times. In 1847, the national legislature recognized that “people gambled anyway”. Instead of a full prohibition, they opted for controlled legalization by authorizing municipalities to designate areas for gaming. An 1852 statute provided for local councils to grant two-year licenses for casinos. Later in the century, however, all gaming was again made illegal after a new wave of moralism swept over the lawmakers.
Modern casino gaming in Chile dates back to 1913 and the vision of the city leaders of Vina del Mar. This seaside resort community (now a city of 300,000) just north of the major port of Valparaiso successfully drew tourism with its racetrack. Local facilities were inadequate, however, to use tourism to foster growth. Council members debated about creating a lake and reclaiming land from the sea to build a municipal baths center, the balneario. From this debate came the idea of casino gaming. There was no casino at the balneario when it originally opened. Shortly after its opening, the idea of a casino gained momentum. Vina del Mar is only eighty miles from the capital city of Santiago, and its newly developed baths and beaches attracted many urban dwellers. The Vina politicians turned their attention to the lawmakers in the large capital city.
It took until 1924 before the national government decreed a new policy that would allow selected resort cities to establish casinos. In 1928, new legislation specifically designated the creation of the first nationally recognized casino at Vina del Mar. It authorized a new local government corporation to spend up to 14 million pesos on a casino at the oceanfront near the balneario. The corporation could also select a private concessionaire to operate the casino. The initial concession agreement would last for twenty-five years. It has been renewed several times (Cabot et al. 1999, 286–288).
Casino gross profits were taxed and the proceeds designated for public works. Taxes are now on a scale up to 70 percent of gross gaming win. Of this tax, 30 percent goes for road construction and improvements in the region around Vina del Mar. The remainder goes to the city government to develop tourism facilities. The initial casino, and the three subsequently authorized, also pay a 7 percent gross win tax directly into the national government’s general fund. In 1988, the national government gained 4,005,989,000 pesos (US$20,000,000) from casinos and other gaming (lotteries and horse racing). Entrance fees charged to patrons go directly to the municipal governments.
The national Ministry of Finance provides auditors who regularly visit the casinos. Local government officials conduct all other gaming inspections. The gaming laws and regulations at Vina del Mar and the other locations require the exclusion of certain people from gaming. These include those under twenty-one, those under the influence of alcohol, those with bad behaviors, and persons known (through previous experiences) not to have sufficient funds. Gaming employees and public employees who deal with public funds also may not gamble. Under the law, women cannot gamble without permission of their husbands. Residents of the casino towns can only gamble if they get prior approval from their municipal governments. An anachronism in the national law, which is not enforced, requires that any unaccompanied women must have the written permission of their husbands, or former husbands, if they wish to enter the casino. Nonetheless, all patrons must still show identification and pay an entrance fee as they come into the casino. Foreigners must show their passports. Te Vina del Mar casino has a restaurant and bar facility, but the other casinos do not. Patrons cannot drink in gaming rooms.
The municipality constructed the current buildings at Vina del Mar in 1929 and 1930. On New Year’s Eve, 31 December 1930, the wife of the mayor of Vina del Mar cast a ball into a spinning wheel. A croupier called out “Negro y Ocho” (“black and eight”), and the casino was open.
The casino now draws as many as 2,000 players a day in the summer season. During the high tourist time, the casino has twenty-eight baccarat and punto banco tables, eighteen American roulettes (with two zeros), four blackjack tables, and two craps tables in the main gaming room. The casino gives credit to selected players known to have sufficient means to gamble. They will also cash checks. Complimentaries are limited to restaurant and bar services available within the casino. There are no hotel facilities or complimentaries for rooms or transportation. The casino arranges group tours, but there are no gambling junkets. During the summer season, many players come from Brazil, Argentina, and the United States. In other seasons, most players come from the Santiago region.
The casino has 500 employees. During my visit to the casino in the early 1990s, all the dealers in the main room were men. Women could work only the lower-stakes games in the other rooms. The entrance fee is 800 pesos (US$2.50). The casino waives the fee for persons wishing only to observe the art collections regularly displayed in a gallery and hallways or to attend events in the 700-seat showroom.
National laws designated a casino for Arica in 1965. Arica, 1,100 miles north of Santiago, is a hot desert city of 150,000 residents located beside the ocean and near the Peruvian border. Its sandy beaches attract many tourists. In 1969, a casino was approved for Puerto Varas, a town of 25,000 that is 600 miles south of Santiago. Puerto Varas is on a beautiful lake and provides tourists access to magnificent glaciers farther to the south. The beach resorts of Coquimbo, an oceanside city of 75,000 that is 300 miles north of Santiago, won approval for a casino in 1976. In 1990, casinos were also approved for Pucoa, Puerto Natales, and Iquiqe.
The municipal governments own the casinos and contract with private organizations to operate them. All concessions, except in Vina del Mar, run for five years. The concession for the casino at Vina del Mar runs for twenty years. It was renewed in 1989. The concession agreements set the rules of the casino, the games, limits, and the taxation arrangements. Casino operators must also provide entertainment, shows, and other cultural events for the community. There have been continuing discussions regarding the establishment of new casinos in new locations.