Cyprus - Casino Gaming Licensing and Regulatory Landscape
Introduction
Cyprus is the 3rd biggest island in the Mediterranean. It is south of the coast of Turkey, and its neighbors are Syria, Lebanon, Israel, Egypt, and Greece.
History of online gambling in Cyprus
Online gambling globally has taken off and is growing year on year. It is one of the fastest growing industries worldwide. As a result, many new operators want to join the action and open online casinos. However, obtaining a Cyprus gaming license is no easy feat as the iGaming industry is still relatively new to the territory. Founded in 2015, the Cyprus Gaming and Casino Supervision Commission, or Cyprus Gaming Commission, otherwise known as the Commission, is responsible for overseeing the gaming and casino industry in Cyprus.
In 2015 the Cyprus Casino Control Law of 2015 allowed a license to be awarded to Melco Resorts. The license granted was for a resort with a casino and an additional four satellite casinos. Melco Resorts is the only operator on the island that can provide casino services. A prominent location was chosen for this integrated casino resort, as Limassol is the island's central tourist hub. This casino license also grants the operator the right to monopolize Cyprus's online industry for 15 years. In addition, the license allows the operator to open satellite casinos in Nicosia, the capital, and other slot machine parlours throughout the country.
Sports Betting History in Cyprus
Sports betting was legalized in 2012 in the territory. The National Betting Authority (NBA) established itself because of the Betting Law of 2012. The NBA examines applications, licenses, audits, and oversees and helps prospective betting shops and online operators. The National Gaming and Casino Supervision Commission is another regulator that controls the gambling business. There is a greater level of regulation in the land-based gambling market than in the online betting market from a legal standpoint. Digital gaming isn't allowed in Cyprus. Therefore, no operators can offer slots or live casino games online. Offline poker is allowed in Cyprus, but only a few venues are permitted to provide the game.
Two types of Cyprus Licenses
Cyprus only offers its operators and new applicants two types of licenses. Firstly, a Class A license regulates all the land-based gambling operators who are permanently based on the island. Whilst a Class B license regulates all online betting. In addition, both permits cover sports betting. However, horse racing is not allowed on the licenses and is a banned sport.
In addition, the licenses can be applied for by either individuals or businesses:
Business Licence - The operator must be based in Cyprus to apply for a business license. In addition, its main business must be the offering of betting activities. The applicant must also obtain a bank guarantee for €550 000 that will need to remain valid for six months after the license is granted. The operator must also prove that it has enough financial credibility with enough finances to pay any player's winnings. Furthermore, they must comply with all the National Betting Authority's legislation and rules, including the players' protection and the correct control and accounting systems in place. In addition, the bookmakers will need to keep a record of all their customer's betting transactions for a minimum period of 5 years.
Individual Licence: Similar to the business license compliance conditions above, an individual must prove they have sufficient resources, ensure all equipment to be used is thoroughly tested and compliant, and have the appropriate account and control systems set up.
Requirement for a license
To be able to obtain a gambling license, the operator needs to meet the following requirements:
A Partnership with a company based in Cyprus. The other alternative is to maintain a physical presence on the island.
A clean criminal record.
Capital endowment.
To apply, operators must first pay the entry fee of €30,000. Licensing for two years costs €45,000, plus €500,000 of capital is required. The operator must also ensure they comply with all customer protection laws laid down by the NBA and have a Cyprus bank account. One significant rule is that operators are not allowed to fund their accounts with cash. The regulations state that cashless transactions are the only permitted method.
Unlike other longer license periods, a Cyprus gambling license only lasts for two years and will need to be renewed. Any operators found not to be fully compliant with the law can be suspended or even have their license removed by the National Betting Authority.
Prohibited Services
Cyprus strictly prohibits the following betting services, either in land-based venues or online:
Horse racing betting;
Game betting machines;
Spread betting;
Dog racing betting; and
Gambling with Bitcoin.
Rules and Regulations for licensees
Based on the anti-money laundering legislation enacted in Cyprus, service providers must conduct due diligence procedures for client identification purposes before they conduct a transaction or enter into a business relationship with another person. Accordingly, the Law extends the due diligence responsibilities of any Class B licensee, and the following details need to be received for a player to be able to be registered:
Verification that the player is 18 years or over
Confirmation of the identity of the player
The address of the player's residence
An email address that has been validated
A declaration that the customer knows the full terms and conditions and also how to conduct a bet, including the revenue perhaps given to the Class B licensee.
Cyprus Gambling Tax Implications
Any operator that runs a licensed sportsbook will need to pay a tax rate of 13%. The 13% is broken down into a 10% betting tax, and the other 3% gets paid to the National Betting Authority. Of the 3%, 2% the Cyprus Sports Organization receives, and the additional 1% gets used for addiction programmes that help problem gamblers.
Conclusion
A license from Cyprus is not cheap. Moreover, the rules regarding no online licences detract many operators. However, the country is still an excellent prospect with low taxes and a well-defined legislative framework for those who want to start a sportsbook.