The online betting market

Posted on 24 Oct 2016, by Ioanna Solomou

The National Betting Authority ("NBA"), as this has been set out to be the island’s regulatory authority subject to the provisions of the Betting Law of 2012, is proceeding with its plans to launch the review of applications for the authorisation of a regulated online sports betting market.

On October 3rd, 2016 the NBA, will start accepting online betting applications (Class B License applications) for the purpose of review for granting of the necessary license. There is a deadline by November 3rd, 2016 for all online sports betting sites that are currently offering services online through their EU regulation to Cyprus to submit their applications. Failure to do so will result to the specific sites being added in the online NBA’s "blacklist".

Subject to the legal regime as this was enacted in 2012, in order for a physical or legal entity to be providing electronic (online) betting services they must have a Class B License as issued by the NBA.

Class B license encompasses all forms of electronic (online) betting apart from limited benefit games machines, lucky online casino games and electronic betting on horseraces. While 'betting' (on sports or other events) is regulated, the use of any 'game machine' (including poker, horseracing, bingo and slot machines) on the other hand is strictly prohibited.

Class B services provided online may be provided only through a website using a '.com.cy' domain. ISPs in Cyprus are required to have control over all operating websites which offer such services and in particular, and on request from the NBA, they must block access to any unlicensed provider of services falling within Class B or to any other provider of illegal gambling services.

Requirements:

  • The applicant/officer/ultimate beneficiary/holder of significant interest of the legal person (article 15):

    • must not have been convicted for a relevant offence and

    • must be over 25 years old (in relation to natural persons)

The Authority takes into consideration:

  • The current financial condition and the background of the applicant, which includes but is not limited to financial resources, which are available for the provision of these betting services and

  • In case of not clear criminal record, the nature of the previous convictions, the type and the level of the imposed sentence.

The application (article 28):

  • Must be submitted by a company with shares, established in Cyprus or abroad, which has a branch (oversea company) in Cyprus, and its main activity is betting, and its issued and paid share capital is at least €500.000.

  • Must be accompanied by a bank guarantee from a commercial bank which carries out banking business in Cyprus or in a member-state of EU or a cooperative bank, for the amount of €550.000,00 and itsvalidity period must extend to 6 months after the expiry of the requested license.

  • Must be accompanied by information about the obligation of the applicant to install a backup server and a computerized support system in Cyprus.

The Authority must be satisfied that (article 29):

  • The applicant has or can obtain sufficient resources and has the minimum reserves to safeguard the payment of winnings to players.

  • The applicant has proper control system and accounting system.

  • The applicant applies all the terms and regulations during the provision of betting services for the protection of the customers.

  • The applicant safeguards the suitability of any other equipment he may use.

Procedure (article 14)

  • Fees (article 66):

    • €30.000 for one year

    • €45.000 for two years

  • The form (pages 19-31 of regulations), issued by the Authority and has to include:

    • Class of the license (B);

    • Address in Cyprus;

    • Identity and place of residence of the applicant/officer/ultimate beneficiary/holder of significant interest of the legal person if it is a natural person or of the authorized representative if the application is submitted by a legal person

    • Terms and regulations which the applicant is going to apply on the provision of betting services;

    • Financial information;

    • Participation to lawful activities, which includes but is not limited to any interest on any other commercial activities;

    • Criminal record;

    • Information about all the financial and other interests;

    • Any further information and documents required by the Authority.

Validity period (article 24):

  • It is valid for 1 or 2 years, depending on what it is requested by the application.

The information provided with this Article is for informative purposes only. Should you require further information and/or clarifications you may contact Ioanna Solomou.