Betfair to defy Cyprus ban as it complains to EC

Betfair will “continue to attempt to operate in Cyprus” until the European Commission responds to its complaint over the country’s recently passed gambling law.

The betting exchange is to lodge a formal complaint with the EC today over the law passed by the EU Member State on 6 July to regulate sports betting but impose a ban online casinos, poker and exchange betting.

Betfair said its complaint over the legislation, which it admitted “could lead to betting exchanges being prevented from operating in their current format in Cyprus”, argued that the country’s attempted ban on betting exchanges was a discriminatory and disproportionate breach of EU law because all other sports betting products were exempted from the ban.

The online betting and gaming group’s chief legal and regulatory officer Martin Cruddace said the company had been “disappointed” with the inclusion of language purporting to ban exchange betting which could unfairly discriminate against Betfair, having “played a constructive role in the preparatory phase of a draft Cypriot law”.

Betfair said Cypriot authorities, had been unable to substantiate its claims, as required under EU law, that such a restriction was justified because betting exchanges represented an increased risk of money laundering and match-fixing compared to other forms of betting. Betfair highlighted that it was, to date, the only operator to have signed a memorandum of understanding with the Cyprus Football Association for the exchange of information in suspected cases of match fixing.

Betfair generated 4% of its 2011 revenues from the territory, but the share of total profit from the 1.1 million population island is understood to be higher – similar to that generated by the 81.5m million-strong German market – due to operating mainly within a shop environment ahead of the ban. Sports multiples are particularly popular in Cyprus, with poker and casino combined accounting for approximately 50% of Cypriot revenues, above the group-wide average of 22%.

Around 1,000 privately owned betting shops were operational ahead of the ban, allowing customers to deposit over the counter and then bet using computer terminals within the shops. Several betting shops forced out of business have reportedly moved to British Sovereign Base Areas (SBA) on the island to continue operating.

MPs also learnt from the state legal service and police force last week that Greek gambling monopoly OPAP, which operates in Cyprus under a bilateral agreement between the two countries and granted part exemption from the law to allow it to continue offering online games such as Kino, was completely unregulated in Cyprus. House Legal Affairs Committee chairman Ionas Nicolaou admitted that while they had  passed a law to regulate the operation of betting in Cyprus and implement measures to protect players and to avert money laundering, “we realised no-one in authority was aware of how the bets of OPAP are carried out”, according to the Cyprus-Mail.

The country’s law to regulate sports betting but ban online casinos, poker and exchange betting will subject operators licensed by the EU Member State to a 10% tax on revenue and a further 3% payable to the new Gambling Board to be established by the new law.

Casino Choice journalist

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