Reports ECUADOR - MARKET UPDATE
Whether a more liberal market-friendly approach under Lasso will help lift Ecuador from its precarious state remains to be seen. Much will depend on his ability to make alliances with his more left wing opponents in Congress, of which there are many (two-thirds of the lawmakers are affiliated with left-of- centre parties in the National Assembly). Either way, the new administration faces an enormous task ahead of it. Similar moves by his predecessor, President Lenin Moreno, led to violent civil unrest in 2019, which left seven people dead.
THE GAMBLING BAN
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. Casinos had been present for over 50 years before then and were quite large scale and present mostly in Quito and the Port of Guayaquil.
Under previous legislation, casinos operating in Ecuador had to offer - in addition to slots - at least four different types of table gaming in five- star hotels and two to three types of table gaming in three- and four-star hotels.
Correa approved changes to gambling laws in 2008 with the Regulation of Casinos in the Tourism Law. Te law ruled that casinos could in the future only be part of a ‘hotel de lujo,’ meaning in a five star hotel located in a tourist
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hot spot. Around 30 large scale casinos fell under this category. However, around 100 standalone slot parlours, which were not attached to casinos, continued to operate via a licence granted to them by local municipalities. At the same time, the number of illegal slot machines in small businesses grew rapidly.
Correa had long been opposed to gambling on principle, saying that casinos like alcohol “lowered the standard of living of a society.” Arguing that casinos were “financed by international mafias,” he argued (rightly in the case of slot parlours at least) that “judges had intervened to fraudulently protect the rights of companies engaged in this business.” He also warned that Ecuador should avoid following the path of Peru, which in his opinion had become ‘flooded’ with gambling halls, “even in the Amazon jungle.”
In September 2010, he announced that his government would seek to ban casinos and gambling completely via referendum. Te date of the referendum was finally set for May 7, 2011, and in a move widely perceived as a means to further prove the legitimacy of his regime ahead of the Presidential elections in 2013, 10 crucial issues were put before the Ecuadorian people.
Many Ecuadorians later confessed that they had not fully understood all of the questions, despite the fact that many of the questions included annexes and explanatory notes. As for gambling, the wording of the question changed slightly as
to how it was originally drafted. Ultimately, Ecuadorians were asked to answer “yes” or “no” to the following question:
“Do you agree that businesses devoted to games of chance such as casinos and slot machine parlours should be banned?” Almost four million Ecuadorians (47.7 per cent of voters) voted that that they were in favour of the move.
Fausto Flores a representative of the legally established casinos in Ecuador claimed that the new gaming law ‘demonised investors’ and was a result of the Ministry of Tourism’s lack of leadership on the issue as it had failed to regulate the industry. Despite some hope that investors would be given some time to slowly wind down their operations, slot parlours were closed quickly and the casino ban went into effect less than a year later.
PRESSURE FOR CHANGE
For many years there was no sign of any kind of resurgence or impetus to bring casinos back. However, in August 2017, businessmen from the gambling sector held a meeting with members from the Ecuadorian Committee on Human and Union Rights (CEDHUS) as well as representatives of the government, to propose the reopening of casinos. Ex-stakeholders argued that from a legal point of view, with the departure of casinos and gambling halls, the constitution as well as a number of local and international laws had been broken. Members of
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