CYPRUS could earn a one-off €100 million and a further €3 million each week from online and electronic gambling if it was properly regulated, an industry expert said yesterday,
With such betting shops already springing up all over the place in Cyprus, online gambling alone is currently big business, turning over some €2.5 billion a year yet not a penny of it goes to the state.
According to Techlink Entertainment Ltd President and CEO John Xidos who runs a Canadian company which has just signed a deal with the Greek government, Cyprus has available to it the practical means for regulating both electronic and online gambling through the controlled issuing of licences, limiting the social cost of gambling, and at the same time securing a sizeable and regular contribution to tax revenues.
“With a proven, functional and socially advanced responsible gaming technology like that offered by Techlink, the state can address illegal gaming, prevent corruption, mitigate the social risks of addiction, and increase revenues by establishing relative taxation of gambling activities”, Xidos said.
After meeting Finance Minister Charilaos Stavrakis yesterday to present the Canadian company’s solutions, Xidos said: “I think the Minister was very open to the conversation, and was very educated about the technology that exists. He agreed to look at the material we provided.”
“There is really no excuse for a government not to implement legislation to do this, especially when it involves minimal cost. You have to ask yourself: why is this not taking place? To give you an example, the average turnover, once regulated by the government, will net €800-1,000 per electronic gambling machine per week. If we’re talking about 10,000 terminals for the sake of argument, that’s €10 million per week. Governments that license this kind of technology normally take between 25 and 30 per cent of the revenue as taxation. That makes €3 million per week, or €150 million per year, which right now is going out the window to maybe two or three, or maybe ten private operators.”
He said this would be in addition to the typical licensing fee of €10,000 per machine, “giving a one-off benefit of €100 million in licence fees before you even switch on the machines.”
Techlink reached an agreement with the Greek government in April for applying its technology for both a ‘wide-area network’ of electronic gaming devices in shops and gambling on the internet there. Xidos said that “Greece is, as we speak, preparing legislation, and this is on course to be approved by parliament by September, after the draft legislation is approved by the EU. At that point, there will be little excuse for other EU member states not to follow their lead.”
“Greece is therefore likely to be the first EU member state to deploy this type of technology, and they’re looking at over 50,000 terminals. With a licence fee of at least €10,000 per machine, that makes at least €500 million” as a one-off benefit to the state coffers, plus an annual revenues stream from taxing the proceeds of regulated gambling.
Once a government has legislated for blocking internet access to online gambling sites and then only issuing licences to credible operators in order to levy taxes, Techlink’s system for online gambling offers a technological solution to a range of legal and security considerations.
These include proxy sites, only allowing online gambling where the players are physically within the geographic jurisdiction of the regulating authority, and ensuring that the players are registered adults who are actually who they say they are.
Xidos was unequivocal about what he sees as a win-win situation for a government opting to regulate electronic and online gambling. “Today, in our opinion, there is a clear dilemma for the state: either to accept and turn a blind eye to an uncontrolled illegal gaming environment, or to establish the regulations and measures required to benefit society in a way that ensures the welfare of the citizens and balances out any social and economic concerns, together with the useful tax revenues in such difficult times”.
