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Ecuador President Guillermo Lasso has signed a regulatory decree under a national communications law to ban sports-betting advertising, provoking uproar from the nation's football clubs.
The wide-ranging decree is 27 pages long, but tucked away in Article 56 are two lines which have, in just a few days, caused upheaval in Ecuador's largely unregulated sports-betting industry.
The article reads: “Misleading advertising is prohibited, as well as all kinds of advertising or propaganda for child pornography, cigarettes, substances subject to control, and all kinds of betting or sports predictions."
How the new prohibition will apply to Ecuadorian football clubs that currently have contracts with foreign online operators remains unknown and the uncertainty has already provoked a response.
The Professional Soccer League of Ecuador (LigaPro) fired back at the sudden ad ban with a statement calling the measure unconstitutional and declaring that the league had already taken undisclosed legal action to challenge it.
“In the aftermath of the pandemic, partnerships with sports forecasting companies have been a vital avenue for securing the revenue necessary to support teams, their infrastructure and youth development programs, as well as a variety of initiatives that benefit players, coaches and fans alike,” LigaPro wrote.
“Surely the national government is unaware that the intended ban threatens to significantly undermine the financial sustainability of soccer.”
In May, Ecuador's government announced that it would impose a 15 percent tax per month on the income of online betting operators, a first for the country where brick-and-mortar gambling has been outlawed since 2011, but authorities have previously held that the ban does not apply to sports betting.
LigaPro made mention of the new tax, calling the advertising prohibition part of a series of “alarming” moves.
The league finished by asserting: “The principle of law has been completely ignored, forgetting that the exercise of constitutional rights and guarantees can only be regulated by law, as established in articles 132 and 133 of the Constitution. Disturbingly, we find ourselves before a clear unconstitutionality, not only in substance, but also in the way in which it has been processed.”
Santiago Zambrano, sports lawyer and founder of Guayaquil-based Conlegal Sports, made note of the fact that this will hit football clubs hardest, not the operators themselves.
“Most of the companies are located in foreign countries making them impossible to sanction, so the penalty will go directly to Ecuadorian clubs,” he said.
Zambrano also highlighted that, in Ecuador, the only professional sport is football, so this measure will not affect the gambling industry in general, but specifically the 26 clubs in LigaPro that have marketing deals with betting firms, which include the entire first league.
