Visit a Cypriot resort town outside of the tourist season and you will soon notice that some of the busiest entertainment businesses still open are betting shops, keno parlours and bingo halls. Cyprus has a long history of gambling, sports betting, and other games of chance which are hugely popular. Indeed, some 75% of Cypriots over the age of 18 participate in some form of gambling.
In recent years, the Mediterranean island has established a reputation as a reliable and reputable destination for online sports betting firms to set themselves up. What is the story behind the island’s rise as an online sports betting hub?
A brief history of gaming in Cyprus
The timeline below highlights some of the key events in recent gaming history in Cyprus:
- 1960 - Early beginnings: Cyprus gained independence from Britain in 1960 and, soon after, the state set up OPAP, the national lottery, which continues to this day.
- 1975 – Casinos in the north: Northern Cyprus, which has a large Turkish influence, permitted the development of casinos from 1975. Many Greek Cypriots (from the south of the island) who wanted to gamble would travel to the North to do so.
- 2000s – Unclear regulations: In the decade after the turn of the century, Cyprus saw a boom in online sports betting, gambling and other games of chance. This was, however, poorly regulated.
- 2012 – The Betting Law: In 2012, the Cypriot government passed new gaming laws designed to regulate the sector. The betting law divided gaming activities into offline (Class A Licenses) and online (Class B Licenses) and set strict rules for each type. It also saw the creation of the National Betting Authority, which would regulate the sector, provide licenses and close down illegal operators.
- 2016 – Class B Licenses issued: Between 2012 and 2016, only Class A licenses were issued, but since 2016 online sports betting sites have been allowed to apply for licenses. On average, Cypriots spend some €250 million with online sports betting sites each year.
- 2019 – Updates to the Betting Law: A 2019 update to the Betting Law introduced some minor regulatory changes and initiatives such as a self-exclusion option for problem gamblers.
Since the 2012 Betting Law, Cyprus has offered a clear, stable and easy to understand regulatory environment for gaming businesses. This has made it a popular place for online sports betting firms to set up operations. Cyprus permits betting firms to target both the Cypriot market as well as customers further afield – as long as those companies have a physical footprint on the territory and comply with all legislation.
Status of online betting in Cyprus in 2020
Like businesses everywhere, 2020 has been a tough year for sports betting firms in Cyprus. Bricks and mortar betting shops were forced to close during the coronavirus pandemic, and a dearth of sports competitions meant there were less options for those who continued to bet online. That said, while handle fell for Cyprus’s online sports betting companies, revenue actually rose this year by 4.7%.
Today there are nine companies who are fully licensed in Cyprus to offer online sports betting, including Bet365, Winmasters and Parimatch. At the same time, the National Betting Authority (NBA) is highly active when it comes to blocking sports betting sites which do not meet its standards – there are currently some 12,500 websites on the NBA’s blacklist.
Firms who wish to apply for a Class B License must provide evidence of capital worth €500,000 and pay annual fees of €30,000 for a one-year license or €45,000 for a two-year license. As an alternative to applying for a full license in Cyprus, many start-ups choose to apply for their gaming license in the Caribbean island of Curaçao. They then set up a payment processor in Cyprus that can funnel earnings from sports betting to the Curaçao company (this is perhaps the most tax efficient and cost-effective option for betting start-ups and SME’s).
Looking forward, the Cypriot government has a number of additional plans for the way betting revenues are distributed in the country. For instance, in June 2020 it was reported that the government was considering funnelling revenues from betting to support professional sports people with training and development.
Offshore alternatives: Have you considered Malta as your gaming company’s destination?
Banking for Cypriot online betting businesses
Cyprus stands out as one of the most attractive destinations around the world for start-ups, SME’s and established firms in the online sports betting sector. From its clear and supportive regulatory environment and low taxes, to its EU membership and a population with a fondness for gaming, choosing this country as a base will make sense for many.
One area where things aren’t so smooth, however, is banking for gaming businesses in Cyprus. As we have discussed before, Cyprus’s mainstream banks are often wary of providing services to customers in innovative and emerging sectors such as online gaming. This can make it difficult to get your business up and running.
Xace aims to fill this gap. Our gaming friendly bank accounts and in-depth knowledge of the Cyprus online betting sector means we are able to provide all the banking features that betting start-ups, SMEs or even major gaming operations need.
If you have selected Cyprus as the destination for your online sports betting business, Xace can provide all the banking services you require. Learn more about our services here.