Casinos could return under terms of Lasso’s proposed economic development law
Outlawed in a 2011 public referendum, gambling could become legal again under terms of President Guillermo Lasso’s proposed Law of Economic Development and Investment. The legislation was approved last week by the National Assembly’s Economic Development Commission and will be debated this week by the full Assembly.
Lasso’s law includes a series of tax breaks and regulatory roll-backs to make foreign investment more attractive, provides incentives for public-private partnerships and overhauls telecommunications sector regulation. In addition, it creates economic development zones under which casinos would be allowed to operate.
Prior to the 2011 referendum, more than 200 casinos were authorized to operate in the country. Quito boasted 42 sanctioned gambling houses while there were seven in Cuenca. In proposing their elimination, former president Rafael Correa claimed casinos preyed on the poor and created a large illegal “underculture.”
In approving Lasso’s proposals, the Economic Development Commission agreed that gambling would be permitted only in the special economic zones and be free of some of the regulations applied in the rest of the country. “Although these zones would be exempt from some business rules, they would be tightly regulated and produce new revenue sources for the national treasury,” said Daniel Noboa, president of the Economic Development Commission. “The policing will be more extensive than existed before 2011 to prevent the illegal operations that worked outside of the casinos.”
Noboa added that casinos would be concentrated in the tourist districts of major cities and efforts would be made to prevent the new industry from taking advantage of the poor. “We recognize the concerns of the referendum and there will be prevision in the law to address these and prevent the abuses that existed before.”
In his presentation to the Commission, Ecuador Investment and Production Minister Julio José Prado said that casinos would provide an incentive for foreign investors to develop resorts that would attract tourists. “In the proposal, we are following a successful precedent used by Japan in allowing gaming in the country,” he said. “Their plan involved location restrictions as well as a regulatory regime that produced large revenue infusions for the government. It also included heavy penalties for illegal casinos.”
According to Prado, the economic development zones are important beyond their allowance of gambling operations. “The zones will operate outside established customs regulations and will allow the expansion of exportation and importation activities. They are part of our national plan to promote trade competitiveness and to streamline the process of the entry and exit of goods into and out of Ecuador.”
The Law to Attract Economic Investment was presented to the Assembly as “urgent” legislation and must be approved or rejected by March 25.