Ecuador: Government aims to tax online sports betting operators

The bill was put forward by Finance Minister Pablo Arosemena to the National Assembly and proposes a 15% tax on GGR on operators. In addition operators will be responsible for imposing a 15% withholding tax on player winnings.

According to the justification for the bill, at least 23 betting and forecasting sites operate in Ecuador, and companies and individuals related to sports betting activities that operate through digital platforms have been identified by the government. At the same time there are also more than a dozen platforms that advertise their services during sporting events without having a physical presence in Ecuador but offer their services from abroad.

The reforms are part of a much wider tax reform bill that includes tax cuts for most families.  It will have a fiscal cost of $195m, President Guillermo Lasso said during a presentation of the bill at the presidential palace in Quito. The new tax reform bill is part of an urgent economic project that must be analyzed by the country’s congress and processed within a maximum period of thirty days from its receipt, as established by the Constitution of Ecuador.

Lasso's tax reform pitch comes as lawmakers are set to vote on a measure to remove him from office, following allegations that he turned a blind eye to embezzlement, which he denies.

The tax proposal would benefit some 340,000 taxpayers and reduce revenue to government coffers by about $195 million.

Last year, the Andean nation collected around $17 billion in taxes, according to official data.

“This law is urgent because it is about injecting money in the shortest possible time to families and, in turn, to the national economy,”  President Lasso said.

Since former banker and centre-right politician Guillermo Lasso was sworn into office in May 2021 there have been signs that the government could begin to liberalise the industry. Lasso’s election means an end to many years of successive left wing governments. Lasso has said that he plans to eliminate the fiscal deficit within four years. In order to do this Lasso will kick-start the economy by attracting increased foreign investment. The latest draft of the “Organic Law for the Strengthening of the Family Economy” will reduce the payment of income tax and will especially benefit middle-class people in the country.

In May last year the National Lottery of Ecuador launched a new mobile sports betting platform.  BET593 features betting on more than 1,500 local and international sports events. The official sports betting operator described its new platform as a “new and modern” and has been designed to meet local demand for sports betting.

Ecuador banned all types of gambling after a referendum was held under the administration of left wing populist Rafael Correa in 2010 who was President from 2007 to 2017.