Ecuador could see the return of land-based casinos as early as February 2025 if a public referendum set for November 16 approves the re-legalisation of such establishments. This potential shift comes more than a decade after gambling was banned in the country following a 2011 referendum during President Rafael Correa’s administration. The latest referendum, spearheaded by current President Daniel Noboa, includes a proposition to permit casinos within five-star hotels, a move seen as a method to stimulate both legal and economic frameworks in Ecuador.
President Noboa’s August 5 declaration included seven referendum questions, among which was the proposal to legalize casinos in luxury hotels and impose a 25% tax on their revenues. This tax is earmarked to support crucial social programs targeting chronic child malnutrition and school feeding initiatives. Initially, the Constitutional Court rejected the multi-faceted nature of this proposal but later approved a reformulated version focusing solely on the legalization aspect.
Industry experts express optimism about the swift return of casinos. Juan Carlos Loza Mendoza, head of LatAm gambling sales at ProntoPaga, anticipates a rapid revival. He notes that the necessary infrastructure and cultural acceptance are already in place, with online casinos and sports betting sites laying the groundwork. The financial ecosystem is also prepared to handle the influx of land-based gambling activities, ensuring secure processing of large financial transactions. “It’s just a matter of a few months, maybe three,” Mendoza predicts, emphasizing the readiness of the local market.
The concept of confining casino operations to five-star hotels has garnered praise from industry veterans. Ramiro Atucha, former CEO of Vibra Gaming and a LatAm gambling specialist, regards this approach as a promising start that could attract substantial investment. He highlights Ecuador’s unique position as a US dollar economy, with a population of around 20 million, as factors that simplify market entry for international stakeholders.
Despite these promising prospects, Ecuador is grappling with significant social and political challenges. The country has recently witnessed violent protests triggered by the government’s decision to cancel fuel subsidies. Additionally, President Noboa has reportedly been targeted in an alleged assassination attempt, heightening political tensions. Atucha asserts that if stability is restored, the economic benefits from legalizing land-based casinos could be substantial. “If they manage to improve the situation and secure some five-star hotels, it would significantly boost the economy, especially with proper taxation,” he suggests, envisioning a scenario where untaxed gambling revenues contribute to the national coffers.
Beyond physical casinos, Ecuador’s relationship with gambling has evolved. While the 2011 ban strictly targeted land-based establishments, online betting remained unregulated. Recent reforms, however, signal a change. In 2024, Ecuador established a 15% gross revenue tax on sports betting, effective from July 1, and introduced a 15% withholding tax on player winnings through Executive Decree No 313. The removal of a ban on sports betting advertising further exemplifies the government’s growing acceptance of gambling activities.
Santiago Albán, managing partner at Heka, an Ecuadorian law firm, views these developments as indicative of the government’s intent to formalize the gambling sector. “The online betting reform demonstrated the government’s capacity and willingness to integrate gaming activities into the formal economy,” Albán remarks, noting the clear taxation and compliance structures now in place. He sees this as a stepping stone toward re-legalizing land-based casinos, potentially ushering in a more controlled and transparent regulatory environment.
As Ecuador approaches the November referendum, the eyes of the gambling industry are fixed on the outcome. The potential re-legalisation of land-based casinos represents not only an opportunity for economic growth but also a pivotal moment in shaping the nation’s future regulatory landscape. While challenges remain, the strategic placement of casinos within five-star hotels promises a controlled entry point for investment, potentially paving the way for long-term benefits within the Ecuadorian economy. Whether the nation can harness this opportunity amidst its current socio-political climate remains to be seen, but the groundwork for a revitalized gambling sector appears to be well underway.
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