Ecuador President Seeks Referendum To Legalize Casinos

January 5, 2024
Ecuador’s newly-elected President Daniel Noboa has asked the country's Constitutional Court to establish a referendum to reopen casinos and gaming halls as a part of his plan to tackle rising crime. 

Ecuador’s newly elected President Daniel Noboa has asked the nation’s Constitutional Court to approve a referendum to reopen casinos and gaming halls as part of his plan to tackle rising crime. 

The proposed referendum on gaming was among 11 questions submitted to the Constitutional Court, of which ten pertain to public safety and curtailing crime. 

The 11th question reads: “Do you agree that casinos, game rooms, betting houses or businesses dedicated to gambling should be allowed to operate, under the conditions detailed in the Annex to Question 11?”

In the Question 11 annex, President Noboa justifies the request for the referendum by citing job losses that resulted from the closure of casinos in 2012, after then-President Rafael Correa held a national referendum to ban them and other forms of gambling.

“With a total of 160 game rooms, the robust and diverse presence of this industry in the country is revealed. Among which, there were 250,000 employees. In short, casinos were not only a source of entertainment, but also a fundamental element in job creation in Ecuador,” Noboa wrote.

Noboa added that unemployment fosters socioeconomic instability, income inequality and rising crime. 

Noboa has an uphill battle ahead of him to convince voters that he should be re-elected in just 17 months time, amid a beleaguered economy and high levels of violent crime.

Presidential terms in Ecuador are usually four years, but the latest election was triggered by the dissolution of parliament by former President Guillermo Lasso.   

In May 2023, Lasso presented a tax plan to Ecuador's Congress that included provisions to tax the income of online betting operators at 15 percent of monthly revenue.

Although casino games are outlawed in Ecuador, authorities have opined that the prohibition does not apply to sports betting. The new tax is due to come into effect this year. 

The motivation for the betting tax was to generate tax revenue rather than legitimising the industry through a regulatory framework, although some legal experts believe the new taxes are a precursor to licensing and regulation of sports betting.

At the end of August, Lasso also signed a regulatory decree banning sports-betting advertising, triggering a backlash from Ecuador’s professional football clubs.

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