Legislation

Ecuador – Ecuador’s public consultation on gambling ruled unconstitutional

By Phil - 29 October 2019

The Constitutional Court of Ecuador (CC) has announced that a local consultation on casinos and gambling is unconstitutional.

Two requests on the same subject reached the court. One came from the President of the Province of Santa Elena Competitive Corporation, Fernando Vargas. The other was put forward by the mayor of Salinas, Daniel Cisneros. The CC decided to unify both for consideration.

In its opinion, the Constitutional Court stated that “authorising the operation of casinos, bookmakers and gambling halls in the Salinas canton, through a local popular consultation, goes beyond the prohibitions established in national regulations.”

The resolution also stated that even if the results of the consultation on the issue were favourable to the opening of the industry then it would still be “legally unenforceable” and regulations on a national scope would be needed first.
Stiff legal penalties are currently in place when it comes to gambling. Article 236 of current rules establish that “the person who administers, puts into operation or establishes casinos, gambling halls, gambling houses or businesses dedicated to the carrying out of games of chance, will be sanctioned with a prison sentence of up to three years.”

In July 2018 the national Electoral Council of Ecuador (CNE) decided to approve the creation of a popular consultation on gaming in both the cities of Salinas, in the province of Santa Elena, and in Bahía de Caraquez, in the province of Manabí. Gaming would be used as a way to generate much needed revenue after Bahía de Caraquez was hit by a 7.8 magnitude earthquake in April 16, 2016. Meanwhile the popular consultation was approved for Salinas in order to boost tourism in the face of the growing economic crisis.

Gambling in Ecuador has been illegal for a number of years. In September 2010 then President of Ecuador Rafael Correa announced that his government was seeking to ban casinos. Claiming that casinos in Ecuador had become hotbeds of corruption and money laundering Correa told local press that his administration would put the question before the Ecuadorian people as part of a referendum. Almost four million Ecuadorians (47.7 per cent of the voters) voted that that they were in favour of the ban.

However momentum has been growing to allow casinos to operate once more. In May a new project put forward by Mauricio Villacís, President of the Association of Ex-Workers for the casino sect that would allow for the reopening of all the casinos in Ecuador. According to Villacís the country is losing out on millions in tax revenue and “more than 20,000 jobs directly and indirectly linked to this activity, with an approximate investment of about US$400m.”