Cyprus Gambling License

Located at the crossroads of Europe, Asia, and Africa, Cyprus offers a dynamic regulatory environment for online and land-based gambling operations. This article will guide you through the process of getting a gambling license in Cyprus, explaining the types of licenses available, the requirements for application, the fees, and the gaming taxation framework.

What is the Gambling License in Cyprus?

Cyprus issues gambling licenses through the National Betting Authority (NBA), which is responsible for the Betting Law of 2012. This law is the backbone of the regulation and supervision of all betting activities in the country. The NBA offers two main types of licenses: one for land-based betting and another for online betting operations. These licenses ensure that all gambling activities on the island meet high standards of fairness, security, and responsibility.

The Main Legislation

The gambling framework in Cyprus is extensive and includes:

• Betting Law 2012 – Law 106(I)/2012: This is the main law for betting.
• Law 108(I)/17/7/2012 and Law 4374/28/12/2012: These laws cover aspects of gambling beyond sports betting.
• Directive 98/34/EC (Technical Standards and Regulations Directive) as amended by Directive 2006/96/EC: This EU directive sets out the procedures for the provision of information in the field of technical standards and regulations.

Types of Licenses and Scope

• Class A License:

  This license is for terrestrial betting services excluding horse racing and applies to physical betting shops. Operators with a Class A license can offer various sports betting options but not horse racing. This category is for traditional bookmakers who operate betting shops where customers can place their bets in person. The license covers cashier systems, betting machines, and customer services from the premises.

• Class B License:

  For online betting operators, this license is for online sports betting only. It does not allow casino games, slot machines, or lotteries; it’s only for sports betting activities online. This license is for businesses that operate online sportsbooks, offering services such as live betting, pre-match betting, and virtual sports betting. Operators must ensure that their platform meets specific security standards to protect user data and fair gaming practices.

Requirements for a Gambling License in Cyprus

To be eligible for a Class A or B gambling license in Cyprus, applicants must meet a set of strict requirements to ensure ethical and legal compliance in the gambling industry. The main requirements are:

1. Age Restriction: The license holder must ensure that individuals under 18 years old cannot access gambling services. This is a key measure to prevent underage gambling and protect minors.

2. Corporate Presence: Applicants must have a physical presence in Cyprus. If the company is registered abroad, it must have a partnership with a Cypriot company. The main business activity of these entities must be related to betting. This requirement ensures a controlled and regulated gambling environment in the country.

3. Financial Resources: Both local and foreign companies must meet a minimum capital requirement. This shows the financial strength of the applicant and that they have sufficient funds to run a gambling operation responsibly.

4. Criminal Record: Applicants must have a clean criminal record, so the company and its key officers can operate with integrity and are not associated with criminal activity.

5. Bank Guarantee: A bank guarantee of EUR 550,000 is required, which must be issued by a bank in Cyprus or another EU member state. This guarantee must be valid for six months after the issuance of the gambling license, as a financial safety net to cover any risks and liabilities.

6. Systems and Controls: The applicant must have control and accounting systems in place for the provision of gambling services. This means that all operations are transparent, traceable, and compliant with the regulations.

7. Compliance with Regulations: Compliance with National Betting Authority (NBA) and Anti-Money Laundering (AML) legislation is ongoing. This means regular audits and reporting to ensure continuous compliance with the laws.

8. Application Fees: Payment of application fees is required to process the license.

The Process to Obtain a Gambling License in Cyprus

Getting a gambling license in Cyprus is a structured and thorough process. Here’s a step-by-step breakdown:

1. Company Registration: Register your company in Cyprus to have a physical presence. This is required not only for licensing but also for corporate banking and tax purposes.

2. Corporate Bank Account: Open a corporate bank account in Cyprus. This account will be used for all financial transactions related to your gambling operation, for transparency and ease of compliance with financial regulations.

3. Application Submission: Submit a detailed application to the National Betting Authority (NBA). This must include business and financial plans, proof of initial capital, and a bank guarantee of EUR 550,000 to cover liabilities and ensure financial stability.

Time and Cost

The time frame for a gambling license in Cyprus depends on the completeness of the application and the specific requirements. It takes around 2-6 months from the submission of a complete application to receive an answer from the National Betting Authority.

The cost is:

• For a one-year A or B license: €30,000
• For a two-year license: €45,000

Additional costs may include legal fees, consultancy fees, and the cost of setting up the technical infrastructure. These costs will vary depending on the applicant’s needs and setup.

Gaming Tax

The gaming tax in Cyprus is a flat rate of 13% on the net gaming revenue. This includes:

• 10% on Net Revenue: This is the main gaming tax, applied on the net revenue of the gambling operation.
• 3% to National Betting Authority: This is further divided as follows:
  • 2% to Cyprus Sports Federations: These funds are for the development and organizations in Cyprus.
  • 1% to Gambling Addiction Programs: This is for initiatives and programs to address and mitigate gambling addiction as per Article 71 of the Betting Law 2012.

Technical Requirements

To get a gambling license in Cyprus, there are technical requirements that must be met to ensure a secure gambling operation. These are:

• Backup Server: It is required to have a backup server in Cyprus. This server must be connected to the National Betting Authority’s (NBA) computerized systems to process transactions in real-time and monitor betting activity. This way, all gambling data can be tracked and monitored for compliance and security purposes.

• Domain: The official website of the gambling operation must use a .com.cy domain. This TLD indicates that the gambling operation is registered and operates in Cyprus, which is a requirement for regulatory purposes.

• Compliance with Betting Law of 2012: The platform must comply with all the requirements of the Betting Law of 2012. This includes user interface, security, data protection, and user accessibility so the platform is safe and fair for the user.

AML for Class B Gambling License in Cyprus

In Cyprus, AML regulations apply to Class B gambling licenses, which are mainly for online betting operators. Understanding and complying with these regulations is essential for licensees to be compliant and to protect their operation from legal consequences. Here are the main AML requirements for Class B licensees:

• Accepted Payment Methods: Class B licensees can only accept payments through debit/credit cards or other electronic payment systems as per Article 54 of the Betting Law 2012. This is to ensure all transactions can be traced and audited.

• No Cash Transactions: As per Article 58(1) of the Betting Law 2012, no cash transactions are allowed for Class B licensees. This is to prevent money laundering by eliminating the anonymity of cash transactions.

• Funds Availability: Class B licensees cannot accept bets unless there are sufficient funds in the player’s account to cover the bet. This is to maintain financial accountability and prevent players from accumulating unsettled debts.

• Mandatory Bank Account: Each Class B licensee must have a valid bank account with a bank operating in Cyprus. This account must be used for all financial transactions of the betting operation, an extra layer of financial control and auditability.

Prohibited Activities

In Cyprus, some forms of betting and gambling activities are prohibited under the current law in land-based and online. The following are not allowed:

• Betting on Horse Races: This is not covered under Class A or Class B licenses and is not allowed on any betting platform.

• Limited Betting Games Machines: Any automated or electronic machines that offer limited betting games are not allowed.

• Spread Betting: Betting on the movement of various financial instruments, indices, or prices rather than a fixed outcome is not allowed.

• Dog Racing: Betting on dog racing is not allowed in Cyprus.

• Bitcoin Gambling: Using cryptocurrencies like Bitcoin for gambling is prohibited.

Conclusion: How We Can Help You

At Polycarpos Philippou & Associates LLC, we can guide you through the process of getting a gambling license in Cyprus. Our team of lawyers is familiar with the legal requirements and the regulatory framework of the gambling industry in Cyprus. Here’s how we can help you:

1. Consultation: We offer customized consultations to help you understand the licensing requirements that apply to your business model, whether online betting, casino, or other gambling services.

2. Application Process: From preparing and submitting your application to liaising with the National Betting Authority, we will handle all aspects of the licensing process. We will make sure your application is complete, compliant, and submitted on time.

3. Compliance and Legal Advice: We will provide ongoing support to ensure your gambling operation is compliant with all relevant laws and regulations, including AML and gambling tax. This includes setting up the required technical infrastructure and advice on best practices for operational and financial compliance.

4. Representation: We can represent you before Cypriot authorities and in any legal disputes or compliance issues that may arise.

5. Business Setup and Strategy: Beyond licensing, we can help with corporate formation, strategic planning, and financial setup to make sure your gambling business is not only compliant but also positioned to succeed in Cyprus and beyond.

By working with us, you have the peace of mind that you are navigating the Cyprus regulatory landscape with lawyers who know the way. Let us help you turn your business into a reality.

For more information or to schedule a free consultation, please contact us.