THE GOVERNMENT has come out all guns blazing to clamp down on betting and online gambling with a draft bill which introduces an all-out ban on online gambling and strict penalties to boot.
Acting government spokesman Christos Christofides yesterday announced that cabinet approved a bill of “extreme importance”, which for the first time aims to regulate “in a complete manner the various aspects of betting and illegal gambling in Cyprus”.
The bill provides for the setting up of a National Gambling Authority (NGA), the prohibition of various forms of gambling, taxation of legal betting, the protection of juveniles and strict penalties for offenders.
The proposed legislation will send shockwaves across the gambling community of Cyprus, which has grown in recent years both in terms of those who place bets and those who provide the service.
Officials estimate the annual turnover of online gambling alone to be €2.5 billion. Recently, online ‘casinos’ and betting shops have popped up all over major towns, taking advantage of an apparent loophole in the law.
The new bill puts a three per cent tax on total turnover for all forms of legal gambling, as opposed to the previous ten per cent on profits only for those forms of gambling that came under the existing tax law.
The police leadership has bemoaned the fact that the surge in gambling on the island has resulted in the increased activity of loan sharks and subsequently more crime.
According to Christofides, the bill provides for stringent penalties against offenders ranging from €8,500 for underage betting up to €170,000 or five years imprisonment or both for violating provisions relating to the operation of online casinos and slot machines.
He noted that the new Authority will have a wide range of powers, aiming to “effectively control and monitor those licenced to offer betting services as well as their premises, and to protect young people and other vulnerable members of the population from the adverse effects of betting and electronic gambling.”
The bill was drawn up with the cooperation of parliament and the European Commission, whose observations were incorporated in the bill, he said.
“The main objectives of the bill are first, to crack down on illegality with regard to online gambling with an explicit ban on casino games offered online as well as slot machines. Second, to modernise existing legislation governing and regulating betting, be it the traditional way through bookmakers or through the internet. And thirdly, the protection of minors and vulnerable groups of the population from the adverse effects of gambling,” said Christofides, adding, “It is well known that this form of gambling has become a social wound in recent years in Cyprus.”
The NGA will comprise of an “independent president of recognised standing and integrity, in which four government members and two external members with the relevant expertise will participate”.
The proposed bill divides betting into two categories. The first involves making or accepting bets on a sheet, known as the coupon, which will require prior approval by the NGA. There will be a transitional period of 18 months from the enactment of the law to allow for the installation of a computer system for the issuing of these coupons.
“With the computerisation of the system, which is very important, we can have better control of the game being played, the profits of the recipients and by extension the tax which the Cyprus Republic should collect,” said the acting spokesman.
The second category includes the taking of bets on sporting events via the internet. A player must be 18 years of age or more, and the licence owner offering betting services can only accept bets on credit cards, debit cards or other forms of electronic cash. Bets cannot be made using cash or cheques.
A third provision in the bill involves an explicit ban on possessing or operating casino games provided by a direct online connection, whether it be online casino or online roulette, or online poker and the slot machines where a direct connection is made either by terminals at betting shops or through computers via the internet.
“So far, the existing legislation and regulations were unclear on these kind of games and that was one of the main reasons these games flourished in our country. Based on the proposed bill, these games explicitly become a criminal offence and those who promote these games are subject to penalties under the proposed legislation,” said Christofides.
The fourth provision considers it a criminal offence when betting is advertised in a way that suggests it is promoting social acceptance or economic success or encourages adults to get involved with betting.
The fifth “significant” provision relates to setting a uniform tax system that applies to all bets, whether they are made at bookmakers or online. The licence holders will have to pay a rate of three per cent of their turnover. So far, those subject to the Cypriot legislation were obliged to pay ten per cent on profits.
“The advantage was that it allowed for profits to be hidden, while (a tax on) turnover provides for more efficient tax collection,” he said.
Finally, the bill provides for the collection of a fee from the licence holder as well as a fee for licensing the premises.
The bill needs parliamentary approval before it can be enacted.
