Cyprus Online Gambling Ban Causes General Controversy

A lawyer contests the ban

From the very moment when it was introduced, the ban on online gambling by the Cyprus government has caused controversy, raised voices about its legality and even some legal challenges.

One local law firm, AA Crown Bet Ltd, which represents the interests of several major overseas firms, stated that the ban caused one company to close sixteen shops providing online gambling.

One of the lawyers stressed that the ban is “discriminatory, disproportionate and in violation of EU laws," adding that a lawsuit against the Cyprus Republic may be initiated, with the law reported to the European Commission and an appeal filed to the European Court of Justice (ECJ).

Another negative opinion regarding the new measure was expressed by Yiannos Georgiades from the Nicosia law firm Georgiades & Mylonas, who opined that the new gambling bill violates provisions on the free movement of goods and services and freedom of establishment in the EU Treaty.

He said: “The government could regulate and tax these services like other countries do, for example, the UK, Ireland, Malta and Spain, ” adding that the European Commission's policy on the matter is to try to avoid a complete prohibition, and that recent ECJ rulings proscribe that should any restrictions seek to protect general interest objectives such as the protection of consumers, they must be “consistent, fair and systematic.”

He quoted one ruling as stating: “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 also observed that while certain circumstances justify restrictions if they aim to protect consumers, prevent crime and money laundering, “it has to be done according to the principles of proportionality and non-discrimination. In the case of Cyprus, it is not justified.”

He justified his opinion with the example of the Greek state-owned betting agency OPAP, which was established in Cyprus based on a bilateral agreement between the two countries, and 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, cautioning that 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.

However, on July 12, the police issued a warning that the measure will be implemented without delay, and that its provisions, which make possession and/or operation of devices for the purposes of running an online casino and the advertising of online gambling illegal, may lead to penalties of up to five years in jail and/or a Euro 300,000 fine.

What's more, it was specified in the police that criminally responsible will be held not only those owning or running gambling joints but also the gamblers.