The Betting Law of 2012 (the “Law”) constitutes a technical rule under the Laws on the Procedure for the Provision of Information in Relation to Certain Technical Rules 2003 and 2004, according to “Directive 98/34/EC of the European Parliament and Council.
The Betting Law essentially upgrades the regulation of traditional and newer forms of betting in Cyprus. It has now been four years since the law was enacted; however, it has been enforced during the last two years, and only Class A licenses have been issued to date. As for Class B licenses, the applications have been available as from 1st of October 2016.
Pursuant to the provisions of the Law, the National Betting Authority is appointed (‘NBA”), and undertakes to receive, review, examine and make the final decision of approval or withdrawal the applications as well as to monitor the betting services that are provided in the Republic of Cyprus.
The main provisions of the Law are the following:
Types of Licenses
In accordance with the provisions of the Law, betting services are provided only from a person holding a license issued by the designated authority, in the present case, the NBA. There are two classes of license that can be granted under the relevant law, namely, Class A -where the bets are conducted in a licensed premises- and Class B – for online betting. Class B license is granted in respect of the provision of electronic betting services, excluding “gaming machines of limited benefit”, lucky online casino games and electronic betting on horseraces.
It is noted that “gaming machines of limited benefit” include poker type machines or other similar type machines with play cards, as well as any other machines which the NBA deems at its discretion to be included.
Application and Fees
In order to obtain a license, an application must be submitted to the NBA, with the payment of a designated fee, which is EUR 30,000 for a one year license and EUR 45,000 for a two year license.
Betting services can only be provided by licensed persons (physical or legal) and there are three types of betting licenses issued by the NBA:
- Class A license giving authorization for the provision to perform betting services within licensed premises excluding Class B betting services and horse racing betting;
- Class B license giving authorization for the provision of electronic betting. Slot machines, online casino games and electronic horse-racing are exempted.
- Class A bookmaker’s authorized representative, giving authorization of the provision to perform betting services on behalf of a Class A bookmaker within licensed premises excluding Class B betting services and horse racing betting.
The application for a Class A and B bookmaker’s license, can be submitted only by a company with shares, established either in the Republic of Cyprus or abroad and which has a branch in the Republic of Cyprus, with the main activity of betting activity and with an issued and fully paid up share capital of at least EUR 500,000.
The application, must, among others, be accompanied by a bank guarantee of a sum of EUR 550,000 and which has an expiry date six (6) months after the expiry of the license that has been granted. Further, the application is submitted together with evidence and information that concern the obligation to set up a backup server in the Republic of Cyprus. Finally, a number of additional pieces of information and supporting documents are required, including in respect of the UBOs and officers of the applicant company.
Taxation and Contributions
With regards to taxation, the licensed entity/person must pay a betting tax to the Republic of Cyprus and a contribution to the NBA. A 10% betting tax on the net revenue is payable to the Republic of Cyprus and 3% of the net revenue is payable as contribution to the NBA for each accounting period. Please note that one accounting period amounts to one calendar month.
The companies, which have been licensed by the NBA for the provision of betting services and which:
- Are not Cyprus tax residents (the control and the address are not within Cyprus) and
- Do not have permanent premises in Cyprus, as they provide their services online.
- They are not liable for income tax in relation to the profits or benefits earned by the said services. It is noted that the installation of a back-up server within the Republic of Cyprus, would not be considered as permanent asset of the company.
Pursuant to the Law, it is required for the website of the licensed entity/person to include certain information for the protection of the player, such as terms and conditions of the services provided by the licensee, various links for websites approved by the NBA, information on how to express concerns, and the procedure of the compliance examination of a player. It is noteworthy, that the NBA accepted the applications for the licencing of online betting firms from 3rd of October 2016 for a month. A lot of developments and improvements are under discussions in relation to the provisions of Betting Law in order to assist the expansion of this business and in the meantime to protect the public interest and each individual player by imposing the necessary reports and assessments.
Finally, the NBA is in discussions with Banking Institutions with the aim to make the opening of bank accounts in Cyprus possible. Bank account matters are monitored closely and there is regular communication with the NBA, in this regard.
Our team of highly experienced professionals is well positioned to provide legal advice and support with all matters relating to online gaming services in Cyprus. For further information on the legislation and to further discuss you requirements feel free to contact Charles Savva at firstname.lastname@example.org.