Ecuador is embracing a significant shift in its sports betting landscape with the introduction of a new licensing framework and tax regime under Executive Decree 487, signed by President Daniel Noboa. These measures aim to regulate the growing industry, ensuring compliance while addressing concerns about player protection and ethical gaming practices.
New Licensing System
The updated framework mandates that sports betting operators, both resident and non-resident, must acquire a license issued by the Ministry of Sports to operate in Ecuador. The license, valid for five years, costs an annual fee equivalent to 655 unified basic salaries—estimated at $307,850 for 2025. This fee must be paid within the first 20 days of the fiscal year to avoid sanctions, potential blocks, or operational restrictions.
With these changes, the number of registered sports betting operators in Ecuador has grown to 65 as of September 2024, reflecting the government’s effort to formalize the industry.
Tax Regulations for Operators and Players
Starting July 1, 2025, sports betting operators will be subject to a 15% income tax on their gross revenue, excluding player winnings. Additionally, players will face a 15% withholding tax on prizes exceeding their total bets within a monthly period.
To ensure clarity, the government has defined what constitutes a “prize.” As tax lawyer Andrea Moya explained, “The player will be considered to have received a prize when, within a monthly period, the value received for correct guesses is greater than the value bet.” Players must declare these winnings in their annual tax returns, with tax credits issued based on the withholding tax collected by operators.
Regulatory Adjustments and Deadlines
Operators are given a three-month period to align their systems with the new regulations. During this time, public entities like the Financial and Economic Analysis Unit (UAFE) and the National Intellectual Rights Service will update their systems for law enforcement, money laundering prevention, and other compliance measures. Non-resident operators are exempt from sanctions during this period, although full compliance will be expected afterward.
The Ministry of Sports has also been tasked with finalizing regulations governing the licensing framework within this timeframe. Any future adjustments to license fees will require approval from the Ministry of Finance.
Concerns Over Regulation by Decree
While the reforms represent a significant step forward for Ecuador’s sports betting industry, critics have raised concerns about the approach. Santiago Alban, a lawyer at HEKA law firm, emphasized the need for regulation through legislative processes rather than executive decree. He argued, “Even for ethical purposes, for responsible gaming, we need to first work on the basis of the licence. What is going to be needed? How is the government going to interact with the [certification]
labs? What labs are going to be qualified? How is the player going to be protected with his licence? And with all that in mind, have a law, because it is not a matter of ruling just with an executive decree.”
Ecuador’s efforts to regulate sports betting reflect a growing trend in Latin America to embrace the iGaming boom. As the country navigates the challenges of implementing these new measures, it sets the stage for a more structured and accountable gaming environment. With licensing and tax rules firmly in place, Ecuador is poised to foster a regulated industry that balances market growth with player protection and ethical practices.
Source:
Ecuador introduces $307,850 annual sports betting licence, SiGMA, January 9, 2025.
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