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BetFair Consider Legal Action Against Cyprus

The UK internet gambling group Betfair has threatened Cyprus with legal action after the country made most forms of online gambling and exchange betting illegal.

Betfair is considering pursuing legal action against Cyprus after new laws were introduced which ban online gambling and exchange betting.

According to Betfair the new legislation contains some “serious flaws” and is even “inconsistent with European Union law”.

Betfair have said that they are now working with advisors to “understand the potential implications on our business” and will then be taking any necessary steps in order to “reduce the impact on profitability through both legal action and cost management”.

Around 4% of Betfair’s revenues (about £9 million) came from the Cypriot gambling market last year so the group is understandably eager to continue operating.

Last week the Cypriot parliament voted for new laws which see online casinos and betting exchanges banned. The parliament said that it is concerned that it is losing vast sums in tax revenues each year due to online gambling. However, House Finance Committee Chairman, Nicolas Papadopoulos, said that if people wish to continue online gambling then there is nothing to stop them.

The new laws will also place heavy new taxes on pre-existing betting shops however, the national lottery operator, OPAP, is exempt from all new laws. Aside from the lottery, OPAP also runs games of chance in Cyprus and will be allowed to continue doing so as it operates under a bilateral agreement between Greece and Cyprus.

Under the new laws legal betting will be carefully regulated with betting shops having to pay an extra contribution of 3% on net revenue. This money will go to the Cyprus Sports Federation who will divide the money between the Cyprus Football Association (1.5%), other sports associations (0.5%) and a number of responsible gambling programmes (1%).

Aside from meeting resistance from Betfair, local casinos are also protesting preferential treatment for OPAP and there have been reports of arson attacks at a number of OPAP outlets across the state.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.