Big Changes for Cyprus Afoot

Pirate ship sailing near famous rock arch on Cavo Greko peninsula, Cyprus island

Among the sea and sun, there is currently a changing landscape when it comes to gambling in Cyprus. Expansion, regulation, and a crackdown on illegal betting have led to big changes in this small country.

During a police raid on a property in Limassol over the weekend, 19 computers used for placing illegal bets were seized, highlighting the growing power that online and casino betting is cultivating in Cyprus.

The current situation

As the political struggle between northern Cyprus and the Republic continues, so does the attitude towards land-based casinos. With around 30 over the border in the north, the Republic has been slow to catch up. Still, its first is due in April 2021, and they’ve gone big! Europe’s first casino resorts, the City of Dreams Mediterranean, will open in Zakaki, Limassol. But, in the meantime, there will be satellite slots-only casinos in Nicosia, Paphos, Larnaca, and Famagusta.

It is estimated that this world-class project will attract 300,000 additional visitors each year, a real boost to the tourism industry, which suffers from over-crowding in summer and a dearth in winter.

Lawrence Ho Yau Lung, Melco International’s CEO, said of the project: “The temporary facilities are due to open in the summer. We have exciting times ahead. And in two and a half years, the permanent integrated resort will open.”

But, as times are changing for this country, regulations are getting tighter. Recent investigations by the Turkish Board of Investigation on Financial Crimes (MASAK) has recently uncovered that some 13 of the casinos in Northern Cyprus have fallen afoul of regulations and are now being investigated for illegal betting. The total amount of laundered money allegedly amounts to around $5 billion.

Regulation in Cyprus

Until 2012, when the National Betting Authority (NBA) was formed, Cyprus had no gambling regulator. Then the popularity of online gambling created the need for a legal framework.

The NBA has proven strict in its criteria. It currently offers a Class A license to betting shops and a Class B license for interactive betting that was introduced in 2016. In order to hold a license, a company needs to be local to the island and access to a backup server is required to perform regulatory supervision over betting services offered to Cypriots. What’s more, license holders need to have capital of at least €500,000 (£438m/$585m) to get a license.

A second regulator is operating in the country also, the National Gaming and Supervision Commission, created to regulate the super casino in the Republic, which is due to have a soft launch of sorts later this year. The NBA regulates the licenses for 11 online betting providers and 600 betting shops across the country. It has also recently announced the implementation of its services and is developing a system that is due to launch in around a year from now.

The system will fully automate the NBA’s procedures, enabling licensees and applicants to process and track their applications online. The system will also include betting monitoring, which it is hoped will prevent fraudulent transactions, reducing costs for both the NBA and the companies licensed by them.

However, there are subtle differences – while the age for gambling in Cyprus is 18, there will be a strict over-21 policy at the new casino.

Hopes for the future

It is hoped that the completion of the Republic’s Melco casino will bring an economic boost to the country. Since being made a member of the European Union in 2004, the country has gone through a serious economic crisis, and many hope the casino will bring a much-needed boost to the economy.

With the ex-chief of the UK Gambling Commission, Nick Tofiluk, heading up the operation, it’s obvious that the new committee means serious business. Tofiluk spent ten years as executive director of regulatory operations at the UKGC. His input will be needed in ensuring that the new casino becomes squeaky clean in its regulations because Cyprus cannot afford to have the City of Dreams fail.

With groundbreaking due to start later this week, the complex is expected to generate around €700m (£613m/$815m) per annum, which amounts to around 4% of the Republic’s GDP. To operate successfully, it will need to employ approximately 2500 permanent members of staff. Guests are expected to flock to its 500 bedrooms in a luxury hotel, over 9000 square meters of meeting, conference, and exhibition space, and an impressive gaming floor with 136 tables and over 1,000 slot machines.

However, with huge changes from a draft bill submitted to the EU last year due to come into force this summer, there may be more regulatory changes before the first dice can be rolled.

 

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