Cyprus Heads for Online Casino Ban

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Cyprus is a Mediterranean island that hosts a large number of online gambling operators, most of which offer online casino portals. There is a shortage of land casinos in Cyprus. Internet connectivity is conveniently available. Therefore online gambling has flourished on the island, with Cypriots gambling on offshore and local websites. In 2008 the reported extent of online gambling was to the tune of €2.5 billion.

Deputy government spokesman Christos Christofides told the Associated Press news that under existing laws a burgeoning online gambling business on the island has become a "social wound". The problem is that presently online gambling is not explicitly illegal, and hence by exclusion it must be regarded as legal. The chairman of the island's parliamentary Legal Affairs Committee, Ionas Nicolaou, summed up the situation last year when he said, "95% of electronic gambling services in our country operate legally because they are provided over the Internet and there is no authority [on the island] where one can apply for a permit."

The government of Cyprus has been for some time wanting to change this situation. However, what is coming in the way is the requirement of the European Union of providing free movement of commercial services across the borders of the member countries. The gambling laws of Cyprus were last updated in 2007 in an attempt to meet the EU requirements, but apparently without thinking the whole thing through. Therefore Cyprus seems to have been caught in no man's land. Portugal has managed to get an exemption from the EU policy of free trade and free movement of services on grounds of preventing crime and protecting residents. Cyprus has been using that as a precedent and has asked for a similar exemption.

Meanwhile the government of Cyprus has taken concrete steps to ban certain forms of online gambling. The Cabinet has approved a draft bill that seeks to bring in sweeping changes. Christofides has pointed out that the bill still needs legislative approval. The law, if enacted, will ban online gambling on poker and casino games. However, it will allow lotteries and sports betting for citizens over the age of 18 years. But the news for these two gambling formats is not good all the way. The present 10% tax on profits will be replaced by a 3% tax on turnover. Everywhere in Europe online gambling operators and their representatives have been vehemently opposing the tax on turnover as unviable. The Cyprus draft law also seeks to impose punitive measures including fines of up to €170,000 or a five year prison term or both.

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