SBC News Voice of the Sports Betting Industry
Conflicts loom in Ecuador as LigaPro opposes the “Organic Law on Communications” signed by President Guillermo Lasso.
Under deliberation since November 2022, the Law, which mandates “the prohibition of advertising sports betting houses in Ecuador”, was signed by President Lasso on Monday.
The controversial law was drafted to eliminate former policies of President Rafael Correa, who during his tenure authorised the ‘Gag Law‘ on Ecuadorian media. This was regarded as an instrument of state control over media matters, liability, and reporting.
Lasso vowed to end the Gag Law to safeguard Ecuador as a “free society where journalists and media can criticise the government.”
However, the law’s Article 56, which cites “Misleading advertising is prohibited, as well as all advertising or propaganda for child pornography, cigarettes, controlled substances, and all betting systems or sports predictions”, has sparked controversy in the Ecuadorian football community.
Authorised by Lasso, the measure on “misleading advertising” became effective with the signing of Executive Decree 853 on 23rd August.
It’s anticipated that betting houses licensed in Ecuador will challenge Lasso’s directive, claiming the advertising restrictions are “discriminatory and potentially violate freedom of expression.”
The government has yet to clarify why it imposed advertising restrictions on betting houses through a communications law meant to protect Ecuadorian media rights and privileges.
According to the Internal Revenue Service (SRI), which oversees Ecuador’s tax policy and collection, 33 companies operate in the country. Six of these are domiciled locally, while the remainder are international.
Lasso had previously pledged to implement a new “15% transactional tax” on all betting houses, both foreign and domestic, as his office has criticised the SRI for collecting only $480,000 in tax income from betting houses in 2022.
Many interpret Article 56’s approval as a discreet attempt by the President’s office to toughen conditions for the 27 unlicensed betting houses.
In response, LigaPro, the pinnacle of Ecuadorian football, criticised the President’s decisions, arguing they jeopardise its title sponsorship with bookmaker Bet593 and its affiliation with the National Lottery.
In a statement, LigaPro highlighted football’s vital societal role and praised its partnerships with Ecuadorian sports betting establishments. Post-pandemic, these entities played a crucial role in generating essential revenue, enhancing team structures, fostering young talent, and initiating beneficial schemes for coaches, players, and fans.
The league implies the National Government might be underestimating the ban’s potential adverse effects, which could significantly disrupt football’s economic infrastructure. LigaPro stressed many clubs rely heavily on this revenue for compensating players, coaches, and other stakeholders.
Furthermore, LigaPro voiced serious concerns about the ban, ranking it alongside other onerous fiscal measures like the value-added tax on tickets. They questioned the law’s legitimacy, asserting that constitutional rights should be governed solely by legal regulations.
LigaPro strongly denounced what they perceive as a renewed attack on football, its investments, and the entertainment sector. They called for adherence to foundational values and acknowledgement of advertising’s pivotal role in supporting their sport.
Concluding its statement, LigaPro declared its intention to legally challenge this decision, viewing it as contrary to constitutional standards and detrimental to local football. THe league emphasised the importance of defending their constitutional rights and preserving a beloved national pastime.
Miguel Ángel Loor, LigaPro’s President, used social media to call on the government to cease what he considers undue intervention, saying: “We don’t seek handouts. We aspire to thrive, nurture sportsmanship in our youth, and elevate our nation’s spirits.”
Additionally, clubs voiced their opposition. Esteban Paz, Director of Liga Deportiva Universitaria de Quito, conveyed grievances, revealing that attempts to dialogue with the government were ignored, putting teams’ primary revenue streams at risk.
Paz reflected on previous financial hurdles, mentioning increased income tax pressures on clubs and the recent introduction of VAT on event tickets. He also expressed deeper reservations about the government’s plans to meddle with betting sponsorships.
