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Sixty-five sports-betting operators have registered to pay a 15 percent tax on gross revenue in Ecuador, after a government move to extract income from the grey market.
The registry was introduced in July for companies regardless of where they are based. Player winnings will also be taxed 15 percent.
Sixty three of the companies who registered ahead of an official deadline on August 31 are local, plus two foreign operators.
Damián Larco, the director of the Ecuadorian tax service SRI, said the actual number of operators in the country is much higher and that they are ready to block offshore operators that have decided not to cooperate with the new tax rules.
Local operators will pay 15 percent income tax after paying out prizes, while foreign operators must collect and withhold tax through a financial institution.
Ecuador’s gambling market is not legal or regulated and, in 2011, the then President banned bricks and mortar gambling on moral grounds.
However, as former SRI director Francisco Briones explained to Vixio in an interview last year, “gambling in general is a prohibited activity, when you speak to the lawyers and the experts on this topic, they’ll tell you it's constitutionally prohibited here”.
“But what happened, three or four years ago, somebody came up with the idea when talking about sports forecasting, [that] there is no such thing as a gambling ban.
“There was a query to the state lawyer, asking if these sports predictions are considered gambling, and he says ‘no’. So that's how they found some room to start gambling.”
There has been very little political momentum behind the idea of regulating the market and the government has instead elected to try and collect revenue from companies that are already operating in the country, despite the lack of licensing.
Regulation briefly became a priority when new President Daniel Noboa petitioned to open casinos and gaming halls in January, but he withdrew that petition two weeks later after unrelated violence swept the country.
Noboa instead declared a 60-day state of emergency to contain gang violence.
The outbreak of civil unrest essentially torpedoed any hopes of gambling reform, as casinos are seen as a method of money laundering for organised crime in many circles in Ecuador.
