Cyprus Passes Online Gambling Bill; Poker Banned, Sports Betting Allowed

Published on Jul 13th, 2012

The Mediterranean island nation of Cyprus passed a bill last Friday that legalizes and regulates traditional "fixed-bet" sports betting and outlaws other forms of online gambling, including poker. The new law, allegedly designed to prevent illegal operations by criminal entities, has already drawn much criticism.

Under the new system, games such as poker, casino table games, and sports exchange betting are banned. The only games that are now legal are traditional sports betting with online bookmakers and lotteries. The reason exchange betting is illegal, while traditional fixed-bet sports betting is allowed, is that on exchanges, gamblers can play actively in real-time.

For those unfamiliar with betting exchanges, they work in a similar fashion to a stock exchange. In a nutshell, gamblers post the odds at which they are willing to bet for or against a certain outcome and then other gamblers can then take them up on the offer and bet the other side. Thus, players are active in exchange betting, setting the market themselves, as opposed to traditional fixed-betting sites, where the operator posts the lines and players place their bets.

Both the Democratic Rally Party of Cyprus and Democratic Party of Cyprus wanted the total ban of betting exchanges struck from the bill. In fact, this language was actually taken out at the committee stage. It was reinserted at the last moment and the bill was passed with the exchange ban included.

Betfair, one of the world's largest online betting exchanges, was critical of the new law, saying in a public statement, "The company believes the legislation contains serious flaws and, in certain areas, is inconsistent with European Union law."

The company derived about 4% of its revenues from Cyprus last year and received about £9 million in profit. Betfair shares closed down 6.12 pence to 749.88 pence on Monday in London (the next trading day after the legislation passed), a drop of less than 1%. This was a strong recovery from the intra-day low of 718 pence, which represented a 5% decline at the time.

Many, including some members of Cyprus' Parliament, are skeptical of the reasons for the ban on most forms of online gambling. Critics see it as a way to give OPAP, the Greek lottery and sports betting giant, a de facto monopoly in Cyprus. Through an agreement between Greece and Cyprus, OPAP has been allowed to offer brick-and-mortar gambling in Cyprus tax-free. This new law is seen by many as giving OPAP the exclusive rights to online sports betting and lotteries, as these are the two types of games the company offers.

According to a report on CalvinAyre.com, Parliament member Ionas Nicolaou, an opponent of the bill, walked out on discussions in April, saying he "couldn't be bought by anyone" and that some members had "hidden personal interests." In other words, he believed some members of Parliament were in the pocket of OPAP.

In June, protesters burned four of the 120 OPAP outlets on Cyprus, with three other shops rescued before they could be razed. OPAP officials deny any connection between the arson and the pending legislation, but it is widely believed they were linked.

According to the creators of the legislation, which was first introduced last September, the reason behind it was to stop criminal organizations from using online gambling as a means to acquire revenue. While there was a ban on brick-and-mortar gambling, there was nothing specifically forbidding operators from opening up land-based storefronts where customers could place bets online.

The new law will require operators to pay a 10% tax on net sports book revenues and another 3% of gross revenue to a regulatory body. The 3% is divided as follows: 1.5% to the Cyprus Football Association, 0.5% to other sports, and 1% to gambling addiction charities.

If you're from Cyprus, chat about the legislation in PocketFives' all new Cyprus poker community.

Comments

  1. It's good that Cyprus has aligned itself so closely with anything concerning finances and Greece. After all, Greece has such a sterling record of success with finances.

  2.  
    Originally Posted by Gameslut View Post

    It's good that Cyprus has aligned itself so closely with anything concerning finances and Greece. After all, Greece has such a sterling record of success with finances.

    Calm down, everything is safe and justified as long as we can allow our citizens to bet their entire lifesavings on the outcome of a sporting event. Im sure there is no bad that comes out of that...

    good looking out though!

  3. Good for them...

 
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