From gambling reform to a national security crisis – Ecuador’s uncertain path

Lea Hogg January 10, 2024

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From gambling reform to a national security crisis – Ecuador’s uncertain path

In a sudden and unexpected turn of events, Ecuador faces a multi-faceted crisis as President Daniel Noboa (in photo above), has just declared war on criminal gangs, triggered by a brazen attack on a television studio.

Ecuador declares war on criminal gangs

Masked gunmen stormed the live studio of public television channel TC in Guayaquil, leaving the nation in shock. This incident unfolds following a 60-day state of emergency declared due to the mysterious disappearance of notorious gangster Adolfo Macías Villamar, known as Fito.

Armed forces deployed to fight organised crime

President Noboa, in a televised address, announced an “internal armed conflict,” mobilizing armed forces to neutralize transnational organized crime. The urgency prompted Peru to deploy forces to the border to prevent potential spill-over instability. The US has condemned the attacks, offering assistance.

The assault on the TV station exemplifies the gravity of the situation, with masked gunmen terrorizing a live broadcast. As Ecuador faces escalating violence and political unrest, President Noboa’s emergency measures are a result the severity of the crisis. The international community is closely monitoring this unfolding situation. The implications for the nation’s stability and security are on high alert, prompting heightened vigilance and concern.

From hope to more hurdles for Ecuador’s gambling sector

In a nation where the prospects for the gambling sector seemed dim, President Daniel Noboa’s proposals just last week injected a ray of hope, promising a potential shift in the industry’s trajectory. However, the recent surge in criminal activities, the unforeseen attack on a television station today followed by the subsequent mobilization of armed forces have thrust Ecuador into a state of turmoil, far beyond the topic of the proposed gambling debate.

As the country is faced with pressing security concerns and an internal armed conflict, the initial optimism surrounding the gambling reform proposals now faces a cloud of uncertainty.

The envisaged referendum, initially slated for March, may now find itself taking a back seat as a result of the urgent need for national stabilization. With the country dealing with complex challenges beyond the revamp of the gambling industry, the timeline for these reforms may face delays, leaving stakeholders in limbo. As Ecuador confronts a multifaceted crisis, the fate of the gambling sector remains entwined with the broader uncertainties of internal conflict and the repercussions to the economy.

International trade and economic outlook

The surge in violence, linked to drug cartel conflicts, poses a severe threat to the economic outlook of the country.

Ecuador relies significantly on exports for its economic sustenance. Renowned as a key exporter, the nation boasts a diverse range of sought-after products, including fruits, flowers, coffee, seafood, and cocoa. These commodities contribute substantially to Ecuador’s income and international trade.

How will these unfolding events impact the trajectory of the proposed gambling reforms, and what challenges lie ahead for Ecuador’s gambling sector as a result of the current crisis?

Background of latest developments on proposed gambling industry

President Daniel Noboa of Ecuador last week set forth a comprehensive referendum project relating to revamping the gambling sector.

The proposal, presented before the Constitutional Court, advocates for the reopening and operation of casinos, betting establishments, and in-person gambling halls. This initiative is part of an 11-question package slated for processing by the Constitutional Court, with the ultimate goal of being put to a vote by Ecuadorian citizens.

Referendum

One of the points (Question 11) within this proposal specifically queries the public on their stance regarding the operation of casinos, gambling halls, betting shops, or businesses dedicated to games of chance. The referendum’s outcome holds the potential to reverse the prohibition and elimination of in-person gambling halls, a measure championed by former President Rafael Correa. Correa justified the ban in 2011, citing the objective of creating a “healthier environment” for young individuals and shielding families from financial losses attributed to the “vice of gambling.”

Penal code prohibitions to constitutional reform

The legislative response to this prior ban manifested in the Penal Code of October 2013, categorizing the operation of casinos, gaming halls, or betting shops as a criminal offense. Those found managing such establishments could face imprisonment ranging from one to three years, accompanied by substantial fines.

Navigating Ecuadorian regulations, the proposed referendum must undergo scrutiny by the Constitutional Court, determining whether the issues raised can be decided through direct democracy or if an amendment to the Magna Carta is necessary. The court is granted a 20-day window for analysis and opinion issuance. If an amendment is deemed essential, the Executive branch retains the option to submit a revised proposal.

In limbo – uncertain future for Ecuador’s gambling reform

Upon approval of the proposal, the President will issue an executive decree, initiating a 60-day countdown for the National Electoral Council to commence the electoral process.

In the face of these unexpected events however, one cannot help but question the future of the gambling sector. Will the proposed reforms, once seen as a beacon for change, be relegated to the background as Ecuador addresses more immediate and pressing issues?

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