Underground gambling houses (Ecuador)

Underground gambling houses

Since the ban on land casinos (2011), the demand for excitement has not disappeared anywhere - some went offshore online, some went offline. Underground gambling houses (hereinafter - PID) are illegal points that imitate casinos or "slot rooms" without a license and supervision. They break the law, undermine local security and often involve financial and social risks for residents.

Why do FIDs occur?

Supply and demand mismatch. The ban reduced legal offline options, but not the need for gambling leisure.

Relative marginality. Cash turnover and lack of taxes create a motive for illegal operators.

Low barriers of entry. Mini-hall with 10-30 machines, laptop with RNG-software or terminals - less capital costs than the "classic" casino.

Word of mouth factor. Local networks of acquaintances, instant messengers and closed groups quickly attract an audience.

Typical underground formats

1. "A slot room under the sign of a cafe"

Disguised as a bar/cafe/internet club. Play area "behind the partition"; entry by "own."

2. Apartment/Office Club

Small spaces in residential or office buildings. Scheduled work; often interchangeable locations.

3. "Mobile Hall"

Portable machines/terminals at rented points; quick dismantling at risk of inspection.

4. "Hybrid" offline with online

Offline point with terminals for accessing an offshore site, deposit/cache-out through a cashier or e-wallet.

5. "Prize" lottery reels

Imitation of entertainment machines with "points," which are actually converted into money.

How finance and payments work

Cash and quasi-cash: cash, prepaid vouchers, transfers between wallets, less often - cryptocurrencies for "wholesale" settlements.

Unlicensed POS: Micro-terminals and bank agents accepting "service" deposits that actually go to betting/gaming.

Debt books: loans "for their own" at interest or "wagering" - a source of problem dependence.

Black box office: no fiscal checks, opaque margin, "minus control" (remote payout adjustment).

Camouflage and security technologies

Video surveillance at the entrance, calls/chats for admission.

Double doors, "curtains," hidden passages in warehouses or utility rooms.

Quiet panic buttons, instant "restart" on screens, switching to "demo mode."

Frequent moves: short-term rent, "moving at night."

Geography and hotspots

Quito: tourist and business districts (La Mariscal, proximity of transport hubs), mixed clientele - tourists/expats/locals.

Guayaquil: port and shopping areas, areas with dense bar infrastructure.

Provinces and suburbs: small towns near highways, where control is weaker and "noise" is less.

Customer segments

Local players (medium/low income) looking for "fast play near home."

Shift workers (port, market, service) - evening and night hours.

Tourists/expats - occasionally, more often in semi-legal "clubs" in tourist neighborhoods.

Risks for players

There are no guarantees of payments. Totals and jackpots are "adjustable," any "disputes" are decided by the cashier/security.

Fraud and "hidden configuration" of machines/software: overestimated hold, "manual" control of results.

Security. Lack of evacuation/fire regulations, conflicts, extortion.

Debt trap. "Debt to paycheck," collateral, growth of household problems.

Legal implications. Presence at the site of the raid - risk of interrogations/fines/procedural actions (depending on the role and circumstances).

Social effects

Withdrawal of money from the legal economy, growth of shadow turnover.

Local crime around the points (pickpocketing, sale of stolen goods, disassembly).

Pressure on families: debts, conflicts, domestic violence, reduced ability to work.

Reputational costs of districts: "gray" quarters are losing investment attractiveness.

Enforcement and countermeasures

Operational raids (jointly with municipalities/fire/sanitary services).

Administrative pressure: fines for violations of the trade/security regime, closure of premises on "related" grounds.

Finmonitoring: cutting off unlicensed POS, blocking transfers according to "bet/play" templates.

Community policy: work with residents, hotlines, anonymous messages.

Repeated checks: control of the "return" of the point to its original place/sign.

Connection with offshore online

Many PIDs are "access points" to offshore platforms: terminals with account login, replenishment through the operator, "cache-out" in hand. This disguises online excitement as an offline service, complicating control and increasing the risks of money laundering.

How to recognize "underground" (for residents and landlords)

A "cafe/internet club" sign, but a steady stream of late-night visitors "on the call."

Dense curtains, "second doors," cameras at the entrance, intercom access "for your own."

The sounds of electronic machines/clicks at night.

Unexplained POS transfers for "services" that are actually deposits/withdrawals.

Quick tenant/interior change for rumored inspections.

Prevention: What can help communities

Awareness: information campaigns about risks, RG tools, help lines.

Responsible rent: checking the tenant's profile, prohibiting "hidden" redevelopments, an immediate termination clause for illegal activities.

NGO-school-club partnerships: alternative leisure, especially for young people.

Data from banks/fintechs: identification of anomalies on micropayments "for services."

Municipal regulations: uniform hours for bars/Internet clubs, requirements for transparency of POS operations.

Timeline: what happened after 2011 (summarized)

2011-2012: rapid dismantling of legal casinos, part of the demand goes to online/underground "slot."

2013-2019: "pendulum" of local activity - waves of raids, PID moves, the growth of terminal "Internet clubs."

2020-2023: strengthening the role of instant messengers and non-cash micropayments; police/municipal point operations.

2024-2025: whitewashing of sports betting (taxes/licence) - but offline casinos banned; PIDs remain subject to control and raids.

Best Practices (not legal advice)

Players: Avoid FID; no payout protection, high fraud and security risks. Use only legal products (lotteries, licensed sports bets) and responsible play tools.

Landlords/managers: carefully check tenants, include "anti-monopoly" provisions in contracts, interact with the municipality.

Local communities: record anomalies, report to the competent authorities, support alternative leisure and assistance programs for gambling addiction.

Underground gambling houses are a consequence of a strict ban on offline casinos with constant demand for excitement. It's a risk to people and neighbourhoods, from fraud and debt to criminalising space. The fight against PID is not only raids, but also financial filtering of payments, working with landlords and sustainable social alternatives. While the legal offline format in Ecuador is closed, the key to reducing the "shadow" is a combination of law enforcement, prevention and transparent legal channels (lotteries, sports bets with RG), plus real support for those who are faced with a problem game.