Cyprus is an island nation whose economy is based primarily on tourism. In the south of the island of Cyprus there is only one land-based casino, gambling is legal and very popular only in the north, the Turkish part of the territory. Nevertheless, the state of Cyprus encourages and provides infrastructures for gaming and it offers licenses to operate within online poker rooms, sports betting, lotteries, casinos and bingo sites.

Some of the biggest casinos in the world have, in fact, licenses released by Cyprus. This is a system which started some years ago and came to an end with the revision of the Betting Law (Betting Act), made ​​in 2007, which has allowed a fully regulation according to the latest European directives. As concerns costs, taxation, certifications required to operators and procedures in order to obtain a Cypriot license, we can refer to the Collective Gambling Regulation Act 75 (I) of 1997, which regulates gambling market operation in the Republic of Cyprus .

Requirements and costs necessary to obtain a license

If you want to obtain a license and operate as a gambling company, you have to make a request to the Ministry of Finance of Cyprus:

• You can make your request only after the 30th of September of each year;
• You must pay, along with your request, an amount of € 8,543;
• versare, congiuntamente alla domanda, un importo di 8.543 €;

The company asking for a license must fulfil some specific requirements and demands:

• It must operate in compliance with everything reported in the current legislation on company law (Companies Law Cap.113);
• Being a limited liability company registered in Cyprus, passing a strict 'competence and fairness' test, which foresees integrity checks of all the persons (both individual and legal) having a relevant participation within the company. A Cyprus limited liability company is taxed according to the standard rate of corporation tax, that is 35%. As for the shareholders’ dividend distribution, they can claim refunds equal to 6/7 of 35% paid by the company - non-resident shareholders will be taxed at lower rate, only 5%;
• Providing information concerning directors, shareholders with 5% or more property or in the interest of the certifying company asking for control, of some important officials, agreeing to disclose personal information, financial or business information as well as information about the participation of other subjects;
• Proving to be able to manage commercial and financial activities, as well as possessing technical capacity to receive and make payments, ensuring to players their winnings;
• Presenting specifically the agreement terms between the applicant operator and the betting company of which he is representative. In this agreement, it must be pointed that the applicant is duly authorized by the company to act as its representative and to accept stakes on his name and on his behalf;
• Making a guarantee issued by a commercial bank located in Cyprus, after depositing a sum not inferior to € 340,000. This bank guarantee commits the reference bank, in exceptional cases of operator’s insolvency, to pay any sum to anyone that has won in a gambling game.
• Submitting a Guarantee issued by a commercial bank located in Cyprus, after depositing a sum not inferior to € 51,260. This bank guarantee commits the bank reference, in exceptional cases of insolvency, to pay any sum that the operator had to pay to the government of Cyprus as taxes in compliance with the Act;

License requirements for a gambling website

In general terms, as far as concerns online gaming operators, the legislation of Cyprus is fairly permissive because it is defective, so much so that a lot of online casinos located in Cyprus have operated for years without any authorization and outside of the law. Today something is changing, but what are the license requirements for a website using the Cyprus infrastructures as a base for its operations?

• Planning the site so that the monitoring agencies and the international certification systems can control it;
• Maintaining a high level of attention towards the player, offering assistance and collecting claims in order to keep high levels of quality and usability;
• Preventing and blocking activities of minors in gambling games;
• Promoting an attitude and a series of concrete actions to encourage responsible gaming;

Lotteries and Gaming Authority and companies located in Cyprus

The Lotteries and Gaming Authority (LGA) is the competent institution in compliance with the law for gambling licenses’ issuance. This is a system responsible for of the management of any form of gambling through a single set of regulations, thus ensuring a fair and transparent play for users and preventing corruption and money laundering, as well as for of crime infiltration. The authority proceeds ensuring that licensees based in Cyprus are honourable people (in terms of financial and criminal point of view) to perform functions related to gambling. With “companies based in Cyprus”, we mean ‘onshore’ limited liability companies that receive specific authorization by the Lotteries and Gaming Authority. These companies are worldwide taxable at the rate of corporation tax, 35%, which is reduced to a 5% tax rate in the hands of shareholders.

You can find here a partial list of some operators based in Cyprus, having built there the basis for service centres and call centres that count hundreds of employees. This thing results in a skilled, specialized, excellent infrastructure and into a climate favourable to the growth of the gaming industry.

• RummyRoyal
• Prime Poker
• Bingoville
• Pok3d
• Linewiz Casino and Sportsbook
• Golden Arch Casino
• HippoJo
• Free Bingo Game
• Jackpot Cash
• WOW Bingo
• Bingo 101
• Jackpot Capital Casino
• Big Betty's Bingo
• Bingo Funland
• America's Online Casino
• Bingo Heart
• Epoch Casino
• UK Bingo Room
• The BetArena
• Casino Peru
• BetArena Racing
• RedKings Poker

Remote Gaming Regulations - The classes of license

We refer to RGR (Remote Gaming Regulations) to define the set of regulations in force in Cyprus;they are reported in the homonymous document and they are applied to all types of technology and remote games. They were promulgated in order to regulate technical instruments and procedures that are valid for gambling remote control, in accordance with the fundamental principles of gambling reported in the Betting Law.

There are some different classes in which the government of Cyprus sets licenses for the Remote Gaming:

• Class 1: it concerns operators who made a request for games that are based on repetitive events managed by casinos. This license covers casino games, slot machines and lotteries. If the company owner agrees to exercise the activity, he must guarantee winnings. The operator must also use machinery and software that use a RNG (Random Number Generator) approved by the Lotteries and Gaming Authority;
• Class 1 of 4: This is a license for online gaming that includes all types of gambling and skill games and it allows to operate on a Class 4 existing license. The Class 4 operator is usually a supplier of softwares and IT infrastructures and he can be owned by a Class 1 society or he may also be an independent third part operator;;
• Class 2: This license concerns operators who take bets at fixed rate on a single event. It includes traditional bets on risky events and some pool betting, such as sports bets;
• Class 3: This license is for operators who are dedicated only to organize the activities of players and gaming operations, but they don’t share the risk. They operate on betting exchange platforms, pool and poker rooms;they receive only a commission for their activities for third parties;
• Class 3 of 4: This is a license with the aim to promote and favour gambling game that based in Cyprus. This license must be required by all operators who promote or assist gaming business in Cyprus through a Class 4 licensee;
• Class 4: This license is for software providers who want to host and manage remote operators that have one of the game classes mentioned above. These companies can’t participate in the risk game and they can receive only one commission.

To achieve one of the above mentioned licenses, operators must pay following taxes:

• A 'processing fee' of 2,230 €, just to validate the application process and obtain the license;
• An annual fee, which for Class 1, Class 2 and Class 3 corresponds to 7,000 € for every single license. The annual tax for the class 4 is equal to zero for the first 6 months, amounting to 2,300 € for the next 6 months (from the seventh to the twelfth month) and 4,600 € starting from the thirteenth month. The annual fee must be paid within fifteen days from the formal permission of the license and it must be repeated every year;

Taxation applicable by Lotteries and Gaming Authority

• The game fee for Class 1 is 7,000 € per month;
• The game fee for Class 1 of 4 is € 1,200 per month;
• The game fee for Class 2 is equal to the sum of 0.5% on the gross amount of bets accepted in online transactions;
• The game fee for Class 3 is 5% on the net profit that is defined through costs minus bonuses, commissions and expenses of payment processing;
• The game fee for Class 4 corresponds to zero;

As for License Classes 2, 3 and 4, the maximum amount of tax, payable per year from a concessionaire in connection with any license must not exceed € 466,000.