Update: Online Gambling Ban Closer Than Expected?

Update: Online Gambling Ban Closer Than Expected? Draft bill passes Cabinet

The Mediterranean island of Cyprus has decidedly moved on with its plans to introduce a ban on online gambling, as this week the government announced that the Cabinet has approved a sweeping draft bill.

The island is at the moment a home to a number of online gambling companies, but the fact may change very soon with the new bill. According to deputy government spokesman Christos Christofides, the bill, which still needs legislative approval, strives to clarify the provisions of existing law. He added that the current legislation resulted in the blossoming of online gambling industry on the island, assessing this sector as "a social wound."

The provisions of the new draft bill envisage bans on online poker and casino games, at the same time allowing lotteries and sports betting for citizens over the age of 18. The taxation imposed by the new system on licensed gambling venues will be 3 percent of turnover instead of 10 percent on profits. The violation of the provisions involves fines of up to Euro 170,000 ($236,260) or a five year prison term or both.

The island’s government has been trying for some time now to persuade the European Commission that such legislation would have beneficial effect for the island, and that it should be exempt from the EU requirements for 'free trade, free movement of services'. As a positive example of a selective ban, it pointed to the case of Portugal, which used this measure to prevent crime and protect residents.

The last update of the betting laws in Cyprus was conducted back in 2007, with an aim to meet EU requirements, but there were no specific provisions. And thanks to the low number of land casinos and the easy accessibility through the Internet, online gambling became a favorite pastime in the area, which saw the islanders spend an estimated EUR2.5 billion in 2008.

Last year, the chairman of the Cyprus’ parliamentary Legal Affairs Committee, Ionas Nicolaou, explained: “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.”

Based on this statement, one can conclude that, since in the past online gambling has not been explicitly illegal it is therefore to be regarded as legal. The new bill will, however, strive to provide regulations in the area which will no longer lead to such unclear interpretations of the law.

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