Posted 3/9/11 : Cabinet approves draft bill
The government of Cyprus – a Mediterranean island that is home to many online gambling companies – remained committed to banning the pastime this week, with the Cabinet approving a sweeping draft bill.
Deputy government spokesman Christos Christofides told the Associated Press news agency Tuesday that the bill – which still needs legislative approval – will clarify the provisions of existing law which he said has turned a burgeoning online gambling business on the island into what he characterised as "a social wound."
The draft law bans online gambling on poker and casino games, but allows lotteries and sports betting for citizens over the age of 18 years. Licensed gambling venues on the island will be taxed at 3 percent of turnover instead of 10 percent on profits, and punitive measures include fines of up to Euro 170,000 ($236,260) or a five year prison term or both.
The government has been grappling with the issue for some time, seeking to persuade the European Commission that Cyprus should be exempt from ‘free trade, free movement of services' EU requirements and using the case of Portugal as a precedent for a selective ban in order to prevent crime and protect residents.
In the past internet gambling has been something of a grey area, falling under betting laws that were last updated in 2007 to meet EU requirements, but with no specific provisions. Online gambling has flourished on the island due to a lack of land casinos and the convenience of the internet, where Cypriots can gamble on offshore websites – in 2008 reportedly to the tune of Euro 2.5 billion.
And many online gambling companies have made the island their business domicile.
The chairman of the island's parliamentary Legal Affairs Committee, Ionas Nicolaou, summed up the situation last year when he said: “Ninety-five percent of electronic gambling services in our country operate legally because they are provided over the internet and there is no authority [on the island] where one can apply for a permit.”
That has been interpreted as an admission that online gambling in the past has not been explicitly illegal, and by exclusion it must therefore be regarded as legal.
The new law will seek to eliminate that uncertainty.