Published on: October 1, 2025, at 11:20 AM.
Updated on: October 1, 2025, at 11:33 AM.
- Ecuador successfully dismissed a $214M casino damages claim in arbitration
- Tribunal finds Lynton Trading lacked significant US economic engagement
- Casino referendum could potentially revitalize the gambling sector under stringent taxation
A Nevada-based firm has failed to claim $214 million in damages from Ecuador, which it claimed stemmed from the country’s gambling prohibition enacted nearly 15 years ago.
Lynton Trading Ltd. sought the substantial amount due to its investments in Ecuador’s casino industry prior to a nationwide ban on gambling passed by voters in a 2011 referendum. At that time, about 160 gambling establishments were in operation, providing jobs for over 25,000 individuals.
Following the referendum, gambling operators were granted a mere six months to dismantle their operations and leave.
Insufficient US Economic Activity
Lynton argued that the closure obliterated its investments, with its gaming equipment confiscated by the National Police. In 2022, the company initiated international arbitration, asserting that the ban violated an investment treaty between the US and Ecuador.
Recently, an arbitration tribunal in The Hague, Netherlands, rejected Lynton’s claim based on jurisdiction, concluding that the company did not conduct economic activity in the US, thus disqualifying it from invoking the treaty.
Even though Lynton is incorporated in Nevada, investigations, including the Panama Papers leak, revealed that it is managed by Chilean casino mogul Luis Fuentealba Meier and a Spanish national, Roberto Cuadrado Rodríguez, based in Ecuador.
Fuentealba, along with his brother, owns the Gran Casino de Talca in Chile and oversees gaming operations and investments within Peru and Argentina through their firm, Meier Corp. However, they lack significant investments in the US, and Lynton has not engaged in any business there.
In addition to declining jurisdiction, the tribunal ordered Lynton to repay approximately 80% of Ecuador’s arbitration costs, amounting to around $1.4 million, as per the country’s attorney general’s statement.
Future of Casinos in Ecuador
This ruling emerges during discussions by the current Ecuadorian government regarding the potential re-evaluation of the gambling ban. In September, Ecuador’s Constitutional Court dismissed a proposition for a referendum to reinstate casinos in five-star hotels. However, last week, the court sanctioned modified language, paving the way for a vote on November 16.
President Daniel Noboa is keen on exploring how the introduction of land-based casinos, taxed at a 25% rate, could contribute to financing programs aimed at providing school meals and fighting child malnutrition, while also stimulating the economy through increased tourism.