We show that for ultracold magnetic lanthanide atoms chaotic scattering emerges due to a combination of anisotropic interaction potentials and Zeeman coupling under an external magnetic field. This scattering is studied in a collaborative experimental and theoretical effort for both dysprosium and erbium. We present extensive atom-loss measurements of their dense magnetic Feshbach resonance spectra, analyze their statistical properties, and compare to predictions from a random-matrix-theory inspired model. Furthermore, theoretical coupled-channels simulations of the anisotropic molecular Hamiltonian at zero magnetic field show that weakly-bound, near threshold diatomic levels form overlapping, uncoupled chaotic series that when combined are randomly distributed. The Zeeman interaction shifts and couples these levels, leading to a Feshbach spectrum of zero-energy bound states with nearest-neighbor spacings that changes from randomly to chaotically distributed for increasing magnetic field. Finally, we show that the extreme temperature sensitivity of a small, but sizeable fraction of the resonances in the Dy and Er atom-loss spectra is due to resonant non-zero partial-wave collisions. Our threshold analysis for these resonances indicates a large collision-energy dependence of the three-body recombination rate.