by Renee Israel
UK internet gambling group Betfair has threatened Cyprus with legal
action after the country banned most forms of online gambling and exchange
betting this week.
Betfair said that the legislation passed by the Cypriot parliament contained
"serious flaws and, in some areas, is inconsistent with European Union law," and
as such is contemplating the various options available to it.
"We are working with advisors to understand the potential implications on our
business and will be taking all the necessary steps to reduce the impact on
profitability through both legal action and cost management," said the group.
The Cypriot gambling market is extremely important to Betfair, as it
contributed approximately 4% (around £9 million) to the group's revenues last
year.
Cyprus Takes Action Against Online Casinos
On Friday, the Cypriot parliament voted in favour of a measure that will see
online casinos and betting exchanges banned. It raised concerns that it is
losing billions of pounds in tax revenues each year due to online casinos and
exchange betting.
The House President of Cyprus spoke harshly about what he considers the
negative effects of gambling and urged authorities to implement the law in order
to "remove this cancer from the bowels of Cypriot society."
This was countered by House Finance Committee Chairman, Nicolas Papadopoulos
who said that if people wanted to continue gambling online, there was nothing to
stop them - despite the new law.
It has taken a long time to pass the new gambling law as deputies were unable
to reach an agreement over its provisions.
OPAP Exempt from New Regulations
The new legislation also places heavy new taxes on existing betting shops,
all the while exempting national lottery operator OPAP from all of the new laws.
OPAP, which also runs games of chance in Cyprus, is allowed to continue
operating as its acts under a bilateral agreement between Greece and Cyprus.
Legal betting is now regulated and betting shops have to pay an additional
contribution of 3% on net revenue, payable to an as-yet-to-be-set-up gaming
board.
The new gaming board will then transfer the money to the Cyprus Sports
Federation which will split the money among the Cyprus Football Association
(1.5%), other sports associations (0.5%) and responsible gambling programmes
(1%).
Local casinos are up in arms over what they consider preferential treatment
for OPAP, and there have even been reports of arson on several OPAP outlets
across the island-state.
