Cyprus profits from online gambling to reach 5 billion euros in 2012

At a time when the government is refusing to license real casinos on ideological and ethical grounds, there seems to be an explosion of online casino establishments operating legally through servers in other EU countries, usually Malta.

They do this through the free movement of services in the EU. “95% of electronic gambling services in our country operate legally because they are provided over the internet and there is no authority (here) where one can apply for a permit,” said Ionas Nicolaou, chairman of the House Legal Affairs Committee.

Citing a study carried out by specialised company Global Betting and Gambling Consultants, Nicolaou said the turnover in 2008 had reached 2.5 billion euros. The DISY deputy revealed that one of the three biggest providers of online gambling services on the island, with a 30 % market share, turned over around 680 million euros in 2007.

In 2008, credit card spending on online gambling had reached 100 million euros, Nicolaou said. The committee yesterday discussed the problem and heard that legislation was in the pipeline to put the situation under control.

At present online gambling in Cyprus comes under the Betting Law, amended in 2007 to comply with EU legislation for the free provision of services. Now, lawmakers propose to re-amend the law by inserting a clause that would exclude electronic gambling from this list of services.

“The social impact is terrible,” AKEL deputy Aristofanis Georgiou said. “The main aim is to protect Cypriot society.” He said by now most people in Cyprus know a family who has been affected by the gambling. Police said in the past two years they have conducted 1,400 raids in various establishments, reporting 970 individuals and seizing some 7,500 computers.

Because of the absence of specific legislation, a loophole exists in Cyprus whereby organized electronic gambling is prosecutable, but only if the perpetrators are caught in the act. But individuals who play online games from the privacy of their home are not breaking the law.

Nicolaou said it is estimated that the turnover by 2012 will be in excess of 5 billion euros while the 400 million euros these establishments made in gross profit in 2008 will probably skyrocket. Fifteen computers made a profit of 93,000 euros in just two weeks, Nicolaou said. Online casino establishments are cropping up all over the island. All one has to do is walk in, pay the minder the amount they want to bet, and sit in front of a screen.