As predicted, the owners and operators of Ecuador’s 32 legally licensed casinos are preparing to start legal action, both at home and abroad, if the proposed plans to ban gambling are approved by a national referendum. The National Electoral Council (CNE) has officially sanctioned a public referendum on the measure, initiated by President Rafael Correa, for 7 May. Executives of the legal casinos say that the referendum question (Pregunta 2) is too general and does not identify nor distinguish between legally operating casinos in tourist hotels.

Pedro Sánchez, representing the company Apartec and manager of Casino Montecarlo, says that at his casino 433 people would lose their jobs as a result of the President’s actions. According to calculations by casino industry representatives, revenues of some US$250 million annually would be lost from the legal gaming industry if Ecuador votes to close its casinos, which would also be a loss of taxes paid to the government.

The legal casinos pay around US$20 million in gaming tax each year and US$36 million in Social Security payments for the 25,000 people who work in the industry. The casinos also pay some US$15 million annually in fees, expenses and rent to the hotels where they are located. On top of this around 140,000 workers indirectly service the legal casino industry. If casinos are banned then the illegal gambling industry would prosper, as it has in Russia.

At present the licensed casinos are regulated and controlled by the Ministry of Tourism and the Inland Revenue. Any prohibition of the casinos, with or without a referendum, would violate the constitutional rights of workers, judicial security and put investment at risk. Casino owners have said they will await the outcome of the referendum before initiating legal action in Ecuador’s courts and taking the case before the Organisation of American States (OEA), the United Nations (ONU) and, in the last instance, to the International Court in the Hague. (E-03.09.11)

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