Ecuador’s Betting Gambit: New Licenses, Higher Stakes

The Government of Ecuador has implemented new regulations for sports betting operators in the country, marking a significant milestone in the regulation of this growing industry. Executive Decree 487, issued in December 2024, establishes a more rigorous legal framework for sports betting operations in Ecuador.

License for Sports Prediction Operations (LOPD)

The most significant change is the introduction of the License for Sports Prediction Operations (LOPD), which becomes the only valid permit to carry out this economic activity in Ecuador. This license is valid for 5 years and its cost is considerable, equivalent to 655 Unified Basic Salaries (SBU).

With the SBU set at $470 for 2025, the annual cost of the license amounts to $307,850, a sum that operators must pay to the Ministry of Sports within the first 20 days of each fiscal year during the validity of the license.

Requirements and Deadlines

The Ministry of Sports has been designated as the entity in charge of determining the specific requirements for obtaining and maintaining the license. A three-month deadline has been established, from the effective date of the regulation, for the Ministry to issue the necessary regulations.

At the same time, operators have the same three-month period to adapt their systems and implement the necessary mechanisms to comply with the law and regulations issued by the Internal Revenue Service (SRI).

Tax Implications

Since July 1, 2024, a single income tax of 15% on the income of sports prediction operators has come into effect, applicable to both residents and non-residents in the country. This measure seeks to ensure an equitable fiscal contribution from all companies operating in the Ecuadorian market.

Additionally, a 15% withholding tax has been implemented on prizes paid to players. This double taxation aims to ensure that the government obtains a significant portion of the income generated by the sector.

Penalties for Non-Compliance

The decree establishes clear sanctions for operators who do not comply with the new regulations. Those who do not renew their license annually within the established deadline will not be able to continue their activities and will face sanctions, blockages, and corrective measures determined by the Ministry of Sports.

Current Market Overview

As of September 2024, the SRI reported that 65 betting or sports prediction platforms had registered to operate in Ecuador. Of these, 19 are companies or legal entities and 46 are individuals. Among the registered companies, Logflex MT Limited, which operates the Novibet platform, and Kaizen Gaming International, owner of the Betano brand, stand out.

Impact on the Soccer Industry

It is important to note that sports betting companies have had a significant impact on Ecuadorian soccer. According to recent data, 12 of the 16 teams in Ecuador’s Serie A are sponsored by sports betting companies. This reflects the growing influence of these companies in national sports.

The new regulations implemented by the Government of Ecuador represent an important step towards the formalization and control of the sports betting market in the country. These measures seek to ensure that operators comply with established fiscal and legal regulations, while protecting consumer interests and generating a source of income for the State.

However, the success of these regulations will largely depend on their effective implementation and compliance by operators. The sports betting market in Ecuador continues to evolve, and we are likely to see more adjustments and refinements in the regulations as the industry matures and adapts to this new regulatory framework.

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