Ecuador’s sports betting licensing framework is set to be reformed with President Noboa enacting Executive Decree 487, an order initially introduced in 2024 as a self-registration system.
The licence will be valid for 5 years and costs $307,850 annually, the equivalent of 655 unified basic Ecuadorian salaries. As of September 2024, the country has 65 registered sports betting operators.
Income tax on sports betting operators and player prizes
In addition to licensing, sports betting entities will be subject to a single based on gross income minus player winnings. A withholding tax will also be implemented as a 15% income tax on player prizes. These regulations will come into effect on July 1, 2025, and companies that do not comply will have their websites blocked.
To calculate the tax owed, the definition of what constitutes a ‘prize’ has also been stipulated. As reported in local media, tax lawyer Andrea Moya stated, “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 will be required to declare any winnings on their tax return; however, they will receive annual tax credits sourced from the operators’ withholding tax.
Concerns for player protection
In addition to recently overturning the sports betting advertising ban, it seems like Ecuador is embracing the Latin American iGaming boom. But not everyone is happy with the extent of these new regulations. Santiago Alban, an Ecuadorian lawyer with HEKA law firm, expressed concern to , arguing that rather than regulate through decree, the changes should be by law, implemented through a bill processed in the National Assembly.
“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. You need to have a law. You need to have rules. You need to have public policy.”
Upon announcing plans for a basic tax regime in 2023, Francisco Briones, director general of Ecuador’s Internal Revenue Service, stated “We are working on it. We’ve observed external allies trying to regulate as the first step, to know more about the regulation around Latin America. And then we will work on a text for a new law.”
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