A small but dynamic market, Cyprus has shown signs of real promises over the last few years. Learn more about the possibilities this online gambling market offers in this article.
With just over 1.2 million inhabitants, Cyprus has a small population but a quickly growing and very unique online gambling market. The focus is firmly on betting, so operators can concentrate on a single well-regulated vertical to build their brand — perhaps using it as a springboard to enter the larger Greek market. Curious to hear more about online gambling in Cyprus? Keep reading.
Gambling laws in Cyprus
The gambling industry of Cyprus is subject to a very fragmented legislation, with various forms of gaming regulated by different authorities and laws.
Casino gaming is regulated by the 2015 Casino Law and is subject to the authority of the National Gaming and Casino Supervision Commission. Land-based casino gaming is currently a monopoly, with the licensed consortium enjoying a 15-years exclusivity period.
Lotteries and horse racing are regulated directly by the Ministry of Finance. Lotteries are a mixed monopoly of the state and OPAP, while the Nicosia Race club is the only operator allowed to organise and take bets on horse racing events since 1973.
Finally, betting — currently regulated by the 2019 Betting Law — is supervised by the National Betting Authority. Betting is the only form of gambling in Cyprus not subject to monopoly, as well as the only one that operators can offer online. For this reason, it will be the main focus of our article. Betting licenses cover both sporting and non-sporting events, including esports.
The licensing process for online betting services was implemented in October 2016, and the first licensed company started providing its services in January 2017, with three more operators joining in during Q2 2017. As of Q2 2021 — the most recent dataset available — there are 12 licensed online bookmakers on the island.
Cyprus’ online betting market overview
The online betting market in Cyprus has been growing at a sustained pace since the launch of licensed operations in 2017.
Overall, the betting sector’s GGR remained stable between 2018 and 2019 (-0.5%) as well as between 2019 and 2020 (+0.6%), indicating a saturated market. However, whereas land-based betting’s GGR fell by 22% between 2018 and 2020, online betting’s GGR rose by a substantial 47%.
This trend was greatly strengthened by the forced closures of land-based establishments due to Covid-19, as in most other countries. However, as betting is the only form of online gambling available in Cyprus, the country’s data is particularly interesting.
Whereas in most other European jurisdictions the demand for gambling entertainment was absorbed by online casinos, in Cyprus it led to a 31.5% year-on-year GGR increase for online betting in the first two quarters of 2020 despite the cancellation of many sporting events — something truly unique. And, carried by the return of sports, online betting recorded a further 44.1% year-on-year GGR uptick in the second half of 2020.
Available data for the first half of 2021 reveal that the trend is further solidifying: online betting recorded revenues for over €31 million between January and June — an 87.96% year-on-year GGR increase and a whooping 145.5% above pre-pandemic levels.
With land-based betting revenues stagnating as of Q2 2021, it seems clear that Cypriot punters have transitioned en masse to online sportsbooks, which paints a rosy picture for licensed operators.
Cyprus’ online betting licenses and taxation
Licenses for online bookmakers (“Class B” licenses) are issued by the National Betting Authority. Perspective operators can apply for a 1-year or a 2-year license; they cost respectively €30,000 or €45,000. Renewals have the same duration and costs as first-time applications.
Applicants don’t have to be based in Cyprus, however they are required to deposit a guarantee of €500,000 in the national bank. The company’s minimum paid-up share capital is also €500,000.
While there are no monthly fees associated with the license, operators are subject to a total tax burden equal to 13% of their GGR. This is formally divided between a 10% tax and a 3% administrative fee.
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Regulations and sanctions in Cyprus
The NBA imposes on licensed operators a comprehensive set of responsible gambling and advertising regulations, but these aren’t the strictest among comparable jurisdictions.
Operators are required to offer players various responsible gambling tools (self-exclusion, time limits, loss limits, deposit limits), but not to impose the use of said tools on players as is becoming more and more common throughout Europe.
Advertising is expected to be socially responsible. The Advertising Code was revised in July 2021 to address the permissible content of ads and responsible gambling messages, the functionality of age-verification checks, and the use of social media influencers in online marketing. The main aim of this revision was to minimise the exposure minors to gabling advertisement.
The NBA publishes a list of unlicensed gambling operators on its portal, and can mandate internet service providers to block access to their websites.
Sanctions range from warnings to license revocation, plus sizable fines and even imprisonment. Licensed operators in breach of their license’s terms are liable to fines of up to €200,000 and three years of imprisonment; for unlicensed operators the punishment can grow to €300,000 and five years of imprisonment.
The offering of online casino games can be punished with a fine of up to €1 million and a prison term of five years.
Cyprus may be small, but its online gambling market is extremely interesting. The explosive growth of online betting in the last two years — combined with relatively low licensing costs — makes for an interesting proposition. Furthermore, operators willing to enter the market now will have time to build brand recognition, putting themselves in a strong position for an eventual legalisation of online casinos — or to expand to Greece and beyond.
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How can Slotegrator help?
Interested in entering Cyprus’ fast-growing online betting market? Here at Slotegrator we help investors to get started in the world of iGaming.
Let our legal experts help you in the process of license acquisition and welcome your players in a state-of-the-art, fully customisable online sportsbook: our range of products is designed for new businesses to hit the ground running in competitive markets.
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