Online gambling a competitive threat in Cyprus

Over a year on from its original proposal, politicians on the Mediterranean island of Cyprus are still debating a selective ban on some genres of internet gambling.
This week the head of parliament’s legal affairs committee, Ionas Nicolaou, cited the competitive pressure exerted by illegal internet gambling and urged lawmakers to hasten regulatory moves.
Over a year ago the island government started discussing the banning of internet poker and online casinos in Cyprus, while allowing online sports betting to take place….so long as it is offered by locally licensed outlets.
The justification was to “combat criminality and to protect the consumer”, but the proposal came into conflict with European Union principles of free movement of goods and services due to its fundamental inconsistency.
At the time, Attorney General Petros Clerides warned: “We need to convince the European Commission that the ban is in the public interest and that it adheres to the principle of proportionality, as under the EU directive you cannot, except under certain circumstances, prohibit the provision of services from one EU member state to another.”
It appears that the government is still wrestling with the problem, with Nicolaou applying pressure for immediate action due to the competitive threat that online gambling represents to betting that the government regards as legal.
Nicolaou claimed that the spread of ‘illegal online gambling’ has contributed to a significant drop in legal betting, supporting his assertion with data that shows a 20 percent drop in ‘legal’ turnover between 2008 and 2009 – from Euro 107 million to  Euro 82 million – which remained the same in 2010.
Among the revenues impacted was horseracing, which recorded a 20 percent drop between 2008 and 2009 and a 10 percent decline in 2010.
The Greek betting organisation OPAP, which also operates in Cyprus, has been affected by illegal online gambling as well, Nicolaou said, claiming that the numbers illustrated the need for urgency in regulating the situation to ensure that the state collects the necessary tax and protects people from illegal betting.
Earlier this year the Cyprus deputy government spokesman, Christos Christofides, described online gambling in Cyprus as “a social wound” with islanders spending around Euro 2.5 billion a year with online gambling operators.

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