Ecuador introduces new regulations and fees for sports betting platforms

The government of Ecuador, led by President Daniel Noboa, has introduced new regulations for sports betting platforms through Executive Decree No. 487, issued on December 19, 2024. Primicias reports that this decree requires all sports betting operators to secure a Sports Betting Operation License (LOPD) from the Ministry of Sports. The license will be valid for five years, with an annual fee set at 655 unified basic salaries, amounting to approximately USD 307,850 in 2025.

As of August 2024, the Internal Revenue Service (SRI) had registered 65 sports betting sites operating in Ecuador, suggesting that the government could potentially generate at least USD 20 million from this new fee structure.

The decree also clarifies tax obligations, stating that all entities engaged in sports betting activities will be subject to income tax, including non-profit organizations, with exceptions for the Guayaquil Charity Board and the Fe y Alegría Foundation.

A significant change introduced by this decree is the revised definition of "prize" for tax calculation purposes. According to tax attorney Andrea Moya, players will be considered to have received a prize if their winnings within a month exceed their total bets. Additionally, bonuses that players can freely use will also be included in the prize value.

Starting July 1, 2025, operators will be required to declare and pay monthly withholding taxes on prizes awarded to players at a rate of 15%. These withholdings can serve as a tax credit for winners when they file their annual income tax returns. Individuals receiving income from sports betting prizes must report these earnings on their annual tax declarations while considering the tax credits from operator withholdings.