Cyprus was considered the island of Venus in antiquity due to its shape that resembled the goddess' symbol. Even today, though the devastating invasion of 1974 created an occupation zone of 37 per cent of the republic's land, the Cypriot economy is thriving even in times when the global economy faces a severe financial crisis.
In Cyprus the gambling market regulation is still "under construction." Cyprus does not yet have any land-based casinos unlike its counterpart state Greece; however, recent history has shown that when Cyprus decides to create foundations, it does so effectively.
So far there have been many arguments related to legalisation of the gambling market. Contemporary Cypriot legislation draws a line between gambling and betting, whereas gambling means casino and slot machines and betting means sports betting, horse racing, etc.
However, this differentiation continues given that gambling and betting activities are controlled by the Directorate of Coordination of the Computerisation of the Public Sector, while lottery games are controlled by the Directorate of Budget and Fiscal Control (nonetheless, both Directorates are controlled by the Ministry of Finance).
In Cyprus lottery games can be operated by the republic alone, but there is a sub-licence to OPAP (Organisation of Football Prognostics) that originates in Greece. OPAP has formed a subsidiary organisation known as OPAP Cyprus which controls lottery games and sport betting. OPAP entered Cyprus in 2003 following an agreement among both states and it now has 162 betting shops. Horse racing bets can be provided only by the Nicosia Race Club.
Currently casinos and slots are still banned, but lottery, sports betting, horse racing and bingo may be allowed if a licence has been provided by the state. The same is valid for collective bets, i.e. pool betting and fixed odds betting. The non-existence of casinos in Cyprus provided a “gap” that the Turkish occupied part of the republic took advantage of by building 20 casinos, thus providing Cypriot citizens an opportunity to play gambling games and slot machines.
This fact is perhaps the best indicator that things need to change in Cyprus. Given that the republic attracts many tourists every year, it is estimated that the opening of the gambling market will increase their numbers along with the attraction of high roller tourists willing to gamble in casinos. Those tourists are currently lost to the occupied part of the republic.
Moreover, an illegal gambling market exists in Cyprus with illegal shops in many coffee shops. A decline observed in horse racing betting could be attributed to the thriving of illegal gambling activities within the republic. Though the law provides criminal offences for those managing an illegal shop where casino games are played, by punishing the perpetrators with imprisonment and a fine, the illegal marketing endures.
The opening of land based casinos in Cyprus is viewed by certain politicians as “dangerous” for the republic’s population, disregarding the fact that illegal casinos exist within every neighbourhood of the republic. It is estimated that the gambling market of the republic had a €2.5bn turnover in 2008, with gross profit at €400m, while €5bn and gross profit of nearly €1bn is expected by 2012. Moreover, it is estimated that Cypriot ctizens lose in casinos established within the occupied part of the republic €100m every year.
Regarding online gambling, though it is still impossible to be licensed by the state, it is not illegal for licensed operators from other EU Member States to be active in Cyprus. However, in 2010 a bill was drafted that provided for the banning of online gambling. This bill is probably going to be voted in April 2012; nonetheless, the original intention seems illogical given that the financial crisis of our times requires extreme measures and a potential income produced by online gambling cannot be easily dismissed. According to the bill, a national gambling regulator is introduced as an independent body controlling the gambling industry. Moreover, bookmaker licences will be issued differentiated in class A and class B - with both types being valid for two years - whereas class A is needed for land activities and class B is needed for online activities. Nonetheless casino games will be prohibited.
Legal entities wishing to apply for licences must be based in the republic and legal entities wishing to apply for a class B licence must use a back-up server located in the republic and connected with the state's central server. Taxation will be no more than 10 per cent of the profit and criminal offences are introduced for companies providing gambling games in the republic without permission, whereas perpetrators face five years’ maximum imprisonment and a maximum fine of €170,000.
It seems that legislation of the gambling market in Cyprus is a dead end. The republic cannot afford to lose money to the occupied part of the island and cannot afford not to attract more tourists related to gambling. In the times we live in, Cyprus cannot afford to lose any potential revenue given that the gambling market has much to offer. The moral objections and the concern that the opening of land-based casinos could bring misery to the citizens of the republic are undermined given that many illegal gambling shops already exist on the island and many citizens are already addicted to gambling.
Gambling controlled by the state, coupled perhaps with the introduction of a card similar to the one already introduced in Greece (individual player card) could safeguard the interests of the Cypriot society by imposing control over gambling activities that nowadays are left uncontrolled.
All the aforementioned will probably be acknowledged and understood by Cypriot officials; in any case Cyprus has historically shown an unbelievable capacity to adapt in the most trying situations. Moreover, the general Cypriot mentality will provide many opportunities for foreign operators wishing to do business within the republic and profit accordingly. Though the legal regime remains under construction, there is a good time to look at ways to invest and the time is now!
About the author…
Alexia C Couccoullis is Attorney at Law in Greece and Cyprus, a partner in Law Offices Constantinos N Couccoullis and Associates and an IMGL Young Attorney Member.
