Challenges mount on Cyprus online gambling ban

Only weeks old, the ban by the Cyprus government on internet gambling is already attracting flak and possibly legal challenges, according to the Cyprus Mail newspaper Tuesday.

Lawyers for AA Crown Bet Ltd, a local company representing the interests of several major overseas firms, told the newspaper that one company has had to shutter sixteen shops providing online gambling services as a result of the ban, which he described as “discriminatory, disproportionate and in violation of EU laws.”

He added that active consideration was being given to suing the Cyprus Republic, reporting its law to the European Commission and appealing to the European Court of Justice (ECJ).

Yiannos Georgiades from the Nicosia law firm Georgiades & Mylonas argued that the new gambling bill violated provisions on the free movement of goods and services and freedom of establishment in the EU Treaty.

“The government could regulate and tax these services like other countries do, for example, the UK, Ireland, Malta and Spain,” said Georgiades, arguing that the European Commission’s policy on the matter is to try to avoid a complete prohibition

Georgiades referenced recent ECJ rulings that any restrictions which seek to protect general interest objectives such as the protection of consumers must be “consistent, fair and systematic” in how they seek to limit gambling activities.

“A member state cannot invoke the need to restrict its citizens’ access to gambling services if at the same time it incites and encourages them to participate in state lotteries, games of chance or betting which benefits the state’s finances,” Georgiades quoted from an ECJ ruling.

He noted that in certain circumstances it is justifiable if the restriction aims to protect consumers, prevent crime and money laundering.

“But it has to be done according to the principles of proportionality and non-discrimination. In the case of Cyprus, it is not justified,” he said, observing that
the Greek state-owned betting agency OPAP, which was established in Cyprus based on a bilateral agreement between the two countries was excluded from the ban.

“They allow OPAP to operate providing similar services while specifically prohibiting online casinos and slot machines. They offer random number games, games of chance which are very similar,” he said.

Georgiades warned that any betting shop that is prosecuted by the state for continuing to operate will have the opportunity to refer the matter to the ECJ for a ruling.

Police issued a warning last Friday that the new law will be implemented without delay. The new law makes possession and/or operation of devices for the purposes of running an online casino illegal, while also prohibiting the advertising of illegal gambling.

Police highlighted that many provisions in the new legislation provide for penalties of up to five years in jail and/or a Euro 300,000 fine.

Criminal responsibility now lies not only with those owning or running gambling joints but also the gamblers, said the police.