Cyprus passed a law yesterday to regulate sports betting but ban online casinos, poker and exchange betting.
The latter comes as a blow for Betfair, that had been pinning its hopes on an 11th-hour reprieve after lawmakers at the Committee stage considered replacing the outright ban with one just on exchanges offering markets on Cypriot football teams.
The betting exchange leader last week classified Cyprus as a “higher risk” territory during its last FY results presentation, the territory along with Germany and Greece accounting for 13% of the company’s core revenue in the 12 months to the end of April 2012.
Upon passage of the law through the Cypriot parliament, House Legal Affairs Committee chairman Ionas Nicolau was quoted by the Cyprus Mail as saying: “From this day we are handing over to the prosecuting authorities and the state the tools to combat this phenomenon.”
House Finance Committee chairman Nicolas Papadopoulos however said the law would not prevent people from gambling at home if they wished.
Greek betting monopoly OPAP, that runs the lottery and other games of chance in Cyprus under an agreement with Greece, has controversially been exempted from the ban. Police were this week forced to protect 168 OPAP shops after nine shops came under attack from arson and gunfire, believed to be connected to disquiet from other gambling operators over OPAP’s exemption.
Sports betting operators licensed by the EU Member State will be subject to a 10% tax on revenue, as opposed to the 3% of turnover previously proposed in the draft bill approved by the country’s Cabinet in March 2011.
They will also pay a further 3% of revenue to the new Gambling Board to be established by the new law. 2% of this will be a sports betting right – with 1.5% paid to the Cyprus Football Association and 0.5% to other associations – with the other 1% funding programmes preventing and dealing with gambling addiction.
While operators’ rights offer online gambling into Member States from jurisdictions within the EEA are enshrined within the freedom of services and establishment directives within Articles 49 and 56 of the EU Treaty, a series of CJEU decisions going against private operators have eroded these rights in recent years.
According to the CJEU, Member States can restrict private operators’ rights to offer gambling services across borders within the EU, often in favour of the incumbent monopoly, as long as their actions are “legitimate and proportionate” and can be consistently justified in terms of providing better protection for players from crime, fraud and addiction.
Belgium and Germany are among the Member States which have recently cited these rulings to justify restrictions on opening their gambling markets. Cyprus officials are sure to do the same.