Ecuador revokes sports betting advertising ban

Garance Limouzy October 21, 2024

In Ecuador, the government has lifted the ban on advertising for sports betting. This decision, enacted under President Daniel Noboa’s administration, could reshape the financial landscape of sports and media sectors, particularly in football, where advertising revenue is crucial for clubs.

A turnaround in communication law

President Noboa signed Executive Decree 421, which revised Ecuador’s Organic Law on Communications. A clause prohibiting advertising for sports betting and prediction systems, which had been added in August 2023, was removed. This reversal now allows media outlets to once again promote betting activities, which had been banned under former President Guillermo Lasso’s administration.

The initial ban, implemented in 2023, was designed to curb the growing influence of sports betting in media and football sponsorships. However, sports organisations, including the Ecuadorian Professional Soccer League (LigaPro), had expressed concern over the financial repercussions of this decision, arguing that it hindered crucial revenue streams, particularly in the aftermath of the COVID-19 pandemic.

Economic impact on football and media

The financial viability of Ecuadorian football teams had been particularly strained under the advertising ban, as betting companies had become an essential source of income for many clubs. With the return of betting advertisements, industry insiders anticipate that football clubs will benefit significantly. Many teams, whose revenues have been dwindling, can now reinstate or expand partnerships with betting platforms, securing financial stability.

For the media, this change opens up new avenues for advertising revenue. Betting companies, which are known to have a significant advertising presence, especially during football matches and on digital platforms, can now start again to target the Ecuadorian market legally. This, in turn, could provide much-needed funding for both traditional media outlets and online platforms.

Sports betting and taxation

The advertising ban reversal follows the establishment of a new tax regime for sports betting companies in Ecuador. Earlier this year, the government implemented a system requiring sports-betting operators to register with the Internal Revenue Service (SRI) and pay taxes on their earnings. As of August 2024, 65 betting companies—both local and international—registered with the SRI to operate legally in the country, agreeing to pay a 15 percent tax on gross revenue.

This decision was designed to increase government revenue and employment. The return of betting advertisements, in conjunction with these regulations, signals a more structured and legal approach to the gaming industry, ensuring that the sector contributes to the national economy while maintaining oversight.

President Noboa’s decision to lift the advertising ban is not the only indication of his interest in regulating the gambling industry. Discussions around broader legalisation have surfaced under his administration. Earlier in 2024, Noboa even proposed legalising casinos, although this idea was withdrawn amid concerns about rising crime rates and violence.