The 56 voting members of the House of Representatives in Cyprus have approved an online gaming bill that bans casino games and poker while simultaneously legalising most sports betting. The most popular online sports betting which takes place on exchanges is banned.
Online gambling was called a “social scourge” by Minister of Finance Karilaos Stavrakis. He is also on record as hoping that the new laws which permit online sports betting through regulated providers will encourage gamblers to change their betting habits to games which the government can now tax.
The law provides for a 10% tax on net sports book revenues and a 3% tax on gross revenues. 1% of the gross revenue tax will go to charities working on gambling addiction.
Betfair will be hit hard by the law as it generates some £9m or 4% of its global revenues from the island. Betfair shares fell 4.5% on news of the new law. The company released a London Stock Exchange regulatory news announcement that suggested it will initiate legal action:
“The Company believes that the legislation contains serious flaws and, in certain areas, is inconsistent with European Union law…. Betfair is working with advisors to understand the potential implications on its business and will be taking all necessary steps to reduce the impact on profitability through both legal action and cost management.”
Conversely, Greek company OPAP which offers online lottery and keno games will continue to be allowed to operate under an exemption reflecting a bilateral agreement between Greece and Cyprus. Some Cypriot politicians have accused the law’s sponsors of being in the pockets of this huge Greek gaming company. The effect of the law will be to give OPAP what amounts to a monopoly position in the Cypriot market.
The law brings with it some hefty penalties for both service providers and players. Breaches of the law are subject to fines of up to €170k and a maximum of five years in jail.
However, according to a report in Cyprus Mail, House Finance Committee chairman Nicolas Papadopoulos said that, despite the law, “those who want to continue gambling online will simply do so at home.” So far, there have been no reports of Cypriot players being banned from any online poker rooms, nor statements to that effect from the sites.
