Licence Applications

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In mid-2003 the Cyprus Lotteries & Gaming Authority announced that a new licensing regime for online gaming was in the pipe-line and that it was very likely that these new regulations would be issued by the end of February 2004.

These new Remote Gaming Regulations were effectively published and entered into force in April 2004. Through these regulations other gaming activities, besides betting, were introduced. these ranged from online casinos, casino-style games, betting exchanges and lotteries. These new regulations have ensured that not only those who are highly interested in the commercial and tax advantages offered by Cyprus, are satisfied, but even those who are concerned that there could be a proliferation of under-regulated Cypriot licensed sites.

A system of checks and balances was effectively created: an advantageous and competitive regime on one hand and regulation and seriousness on the other.

Through this system, the Cypriot government ensured that the regulations would offer protection to the players, whilst at the same time, excessive bureaucracy and red-tape are avoided, hence enhancing Cyprus's reputation as a reputable financial services jurisdiction.

Highlights of the Legislation

  • Raison d'être behind the Regulations
    • The proper operation on interactive games
    • The protection of players
    • The prevention of money laundering
    • Exigencies of public interest
  • Mechanics
    • The appointment by the Licensee of one key official to personally supervise the operations
    • Appointed key individual person must be a director of the company and is to report to the Authority
    • The Online Gaming System to be tested by an approved laboratory at least within six months prior to the application
    • Player Protection (to come into force within 1 year from the date of these regulations
    • Granting of License - valid for 5 years on a non-refundable basis
  • Player Protection
    • Players funds to be kept separate from Licensee’s own funds
    • Licensee shall instruct and authorize the credit financial institution by which a players’ account is held to disclose any information as may be requested by the Authority
    • Funds in the player’s account, including funds in transit or in the process of being cleared through the banking system must be at all times at least equal to the aggregate of the amount standing to the credit of players’ account held by the licensee
  • Four classes of licenses
    • Class 1 – Online Gaming License;
    • Class 2 – Online betting office license or an online betting exchange office license;
    • Class 3 – License to promote and abet gaming from Cyprus (includes betting exchanges & poker operations)
    • Class 4 – License to host and manage online gaming operators, excluding the licensee himself.
  • Taxation on all Three Classes
    • Online Gaming License - a sum of LM 2000/month in the first six months after the issue of the license & Lm3,000 per month for the entire duration of the of the license period.
    • Online gaming operated by a Class 4 Remote Gaming licensee, licensee who operates the hosting platform shall not pay any tax for the first six months after the issue of the license, then he pays one thousand Cypriot Liri (Lm1,000) per month for the subsequent six months and subsequently two thousand Cypriot Liri (Lm2,000) per month for the entire duration of the license
    • Licensees operating from the hosting platform - a sum of Lm500/month.
    • Online Betting Operations - a sum equivalent to 0.5% on gross amounts of bets.
    • Online Betting Exchanges - a sum equivalent to 0.5% on the sum of all net winnings calculated per player.
    • Pool betting – a sum equivalent to half of one per centum (0.5%) on the aggregate of stakes paid.
    • Provided that in all cases the total maximum of tax payable per annum by one licensee in respect of any one license shall not exceed Lm200,000.

      The Cyprus Remote Gaming Regulations 2004 have undergone a major revamp.

      The proposed new regulations were publicly presented by the Lotteries and Gaming Authority (LGA) in mid-October 2005. The LGA commissioned the Cyprus Remote Gaming Council (MRGC) to lead the consultation process and the Legal & Regulatory Workgroup of the MRGC has actively worked on suggestions for presentation to the LGA. These were presented to the LGA in November 2005 and are now awaiting final approval. [More info]

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