Cyprus Gambling License

Unlocking Sports Betting Services in Cyprus: A Guide to Acquiring the Essential Betting License

OVERVIEW LICENSING REQUIREMENTS COSTS & TAXATION FAQ's CORPORATE STRUCTURE BENEFITS

In response to the rapid expansion of online gambling, Cyprus developed a comprehensive regulatory framework designed to oversee betting activities within its borders. This strategic move was aimed at addressing the growing concerns surrounding online gambling while fostering a secure and regulated environment for both operators and bettors.

By establishing clear guidelines and operational standards, Cyprus sought to protect the interests of its citizens and ensure that gambling activities contributed positively to the economy without compromising societal values.

At the heart of this regulatory ecosystem is the National Betting Authority (NBA), established to ensure the integrity, fairness, and reliability of betting operations in Cyprus.

The NBA plays a pivotal role in the application, licensing, auditing, and supervision of online betting operations, upholding the highest standards of gambling practices on the island.

Cyprus Gaming License Overview

It’s crucial to understand that the Cypriot regulatory environment is particularly focused on sports betting for its online gambling offerings.

Cyprus offers two main types of betting licenses to cater to the diverse needs of the gambling industry. Class A licenses for land-based betting establishments and Class B licenses for online betting platforms.

This focused approach means that Class B licenses strictly permit online sports betting activities, with a clear legislative stance that excludes all other forms of online gambling.

Consequently, activities such as online casino games, slots, bingo, lotteries, and sweepstakes do not fall under the umbrella of legal online gambling operations in Cyprus. The government has deemed these activities outside the scope of permissible online gambling, rendering them illegal within the jurisdiction.

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Cyprus Class B Online Sports Betting License

To apply for a Class B Online Sports Betting License in Cyprus, the applicant must be a company with a minimum paid-up share capital of EUR 500,000. This company must either be established in Cyprus or operate as an overseas entity with a Cyprus branch, primarily engaged in offering betting services.

Additionally, the application process requires the provision of a bank guarantee amounting to EUR 550,000, sourced from a recognised credit institution within Cyprus or another EU Member State. This guarantee must remain valid for a duration extending six months beyond the requested license’s expiry date, ensuring financial stability and the ability to fulfil monetary obligations.

Applicants must demonstrate to the National Betting Authority (NBA) their capability to meet several critical criteria, including:

Financial Capacity: The ability to adequately cover all player winnings, ensuring timely and fair payouts.
Accounting Integrity: The presence of robust accounting systems to accurately manage finances and transactions.
Regulatory Compliance: Adherence to all current regulations aimed at safeguarding players, including responsible gambling practices and player protection measures.

Licenses under this category are granted for a period of either one or two years and are subject to renewal upon submission of an application, contingent on the NBA’s subsequent approval. This renewal process is critical for maintaining continuous operations and adhering to the evolving regulatory landscape, reinforcing the operator’s commitment to legal and responsible gambling operations within Cyprus.

Under Cyprus’s regulatory framework, certain online betting services are unequivocally banned. These include betting on horse races, spread betting, pool betting, dog racing, and Bitcoin or cryptocurrency-based gambling. This clear delineation of prohibited activities underscores Cyprus’s commitment to maintaining a regulated and ethical betting environment.

Fees for Online Sports Betting License

For entities seeking to secure an Online Sports Betting License in Cyprus, the licensing fees are structured as follows: EUR 30,000 for a one-year license and EUR 45,000 for a two-year license. These fees must be paid at the time of the initial application or upon license renewal. In cases where an application is not approved, the applicant is entitled to a 75% refund of the submitted fee.

The scope of the Cyprus sports betting license is broad, encompassing all aspects of sports betting operations. This includes service providers for sports betting, network operators, affiliates, white-label operators, and sports betting software suppliers, thereby eliminating the necessity for multiple licenses.

Possession of a Cyprus Sports Betting License grants operators the capability to conduct their business globally, adhering to the regulations and restrictions specific to each country of operation.

Gaming Tax Structure

The tax regime under the Cyprus licensing framework is designed to be competitive, with online sports betting operators subjected to an effective 13% tax on gaming revenue. This comprises a 10% direct tax, along with a 2% contribution to Cypriot sports organisations, and an additional 1% allocated towards supporting responsible gambling initiatives.

AML Legislation and Compliance

For Class B license holders, acceptable forms of payment include Debit/Credit Card and other electronic payment methods, explicitly excluding cash transactions for electronic bets. Furthermore, Class B operators are mandated to ensure that bets are accepted only when the player’s account has sufficient funds to cover the bet. It is also a requirement for Class B licensees to maintain an active bank account with a bank operating within Cyprus to facilitate transactions.

Technical and Operational Requirements

A key stipulation for Class B licensees is the establishment of a backup server located within Cyprus, integrated with the NBA’s computerised systems. This setup must support real-time transaction processing and provide instant access to information regarding betting activities. Additionally, operators are required to use a website address ending in “.com.cy” and ensure their betting platform complies with the criteria outlined in the 2012 Betting Law.

Licensing Cost Comparison & Taxation

Jurisdiction	Application Timeframe	Local Officer Requirements	License Costs	Annual Renewal Costs	Corporate Taxation	Gaming Tax	Local Server Requirement	Local Company Requirements
Alderney	3-6 months	Yes	£17,500	£35,000-£400,000	0%	0%	No	No
Anjouan	3-4 weeks	No	€17,000	€17,000	0%	0%	Replication	No
Curacao	8-10 weeks	Yes	€54,893	€47,450	2%	0%	Yes	Yes
Cyprus	6-9 months	Yes	€30,000	€30,000	12.5%	13%	Replication	Yes
Gibraltar	6-9 months	Yes	£100,000	£100,000	12.5%	1% max £425,000	Yes	Yes
Isle of Man	3-6 months	Yes	£36,750 – £52,500	£36,750 – £52,500	0%	0.1 – 1.5%	No	Yes
Kahnawake	4-6 months	No	$40,000	$20,000	0%	0%	Yes	No
Malta	6-12 months	Yes	€25,000 – €85,000	€25,000-€85,000	35%	5% max €600,000	Yes	Yes
Ontario	6-12 Months	No	$100,000	$100,000	15%	15-25%	No	No
Tobique	6-8 weeks	No	€36,000	€18,000	0%	0%	Compliance Platform	No
United Kingdom	3-6 months	No	£4,224- £91,686	£4,199-£793,729+	19%-25%	15%-21%	No	No

The figures presented in the table above serve as estimates and are provided for informational purposes. It’s important to note that certain costs are approximations and may vary based on fluctuations in exchange rates.

It’s crucial to understand that the mentioned costs exclusively pertain to licensing fees and do not encompass expenses associated with legal fees, compliance procedures, or liaising with gaming regulatory authorities.

Furthermore, it’s essential to consider that additional charges might apply, including fees for key person licenses, local substance requirements, minimum capital obligations, and other regulatory prerequisites beyond the scope of the license costs.

Explore the diverse jurisdictions we specialise in through our comprehensive licensing support. Select a location from the dropdown menu to gain detailed insights into each region’s licensing landscape, requirements, and strategic advantages for your iGaming venture.

The Cyprus Gaming License FAQ

What are the main types of gambling licenses available in Cyprus?

Class A for land-based operations and Class B for online betting activities.

How does the NBA oversee gambling operations within Cyprus?

The NBA ensures gambling fairness, protects vulnerable groups, and prevents gambling-related crime..

What are the financial commitments required for obtaining a Cyprus gambling license?

The licensing fees are €30,000 for a one-year period and €45,000 for a two-year period. These fees are due at the time of the initial application or when renewing the betting license. Should the application be unsuccessful, 75% of the fee will be refunded. Additionally, applicants must demonstrate a paid-in capital of €500,000 and provide a bank guarantee of €550,000 to meet financial assurance requirements.

What is the purpose of the €550,000 bank guarantee?

To ensure operators can cover player winnings, highlighting financial security and player protection.

What is the application timeframe?

The typical time-line for the completion of the application is between six (6) to nine (9) months.

How are licensed sports books taxed in Cyprus?

A combined 13% tax rate, including a 10% betting tax and a 3% contribution to the NBA.

What advantages does holding a Cyprus gambling license offer to operators?

Market access, favourable taxation, and strong regulatory support.

Can foreign entities apply for a gambling license in Cyprus?

Yes, both Cypriot and foreign entities can apply, subject to meeting regulatory requirements of registering a subsidiary in Cyprus. The company should have a paid-in capital of at least €500,000.

What measures must operators take to ensure player protection?

Operators must implement effective control and accounting systems and adhere to AML and player protection regulations.

What are the consequences of non-compliance with Cyprus's gambling regulations?

Can include fines, license suspension, or revocation, depending on the severity of violations.

How does the licensing process in Cyprus compare to other jurisdictions?

Cyprus’s process is noted for its clarity and efficiency, albeit with significant financial prerequisites.

Are there specific AML requirements for gambling operators in Cyprus?

Strict adherence to AML directives, including customer due diligence and transaction monitoring.

How can operators ensure compliance with the NBA's standards?

Regular audits, adherence to operational guidelines, and open communication with the NBA.

Can operators offer all types of gambling activities under a single license in Cyprus?

Class B licenses cover online betting activities, excluding all other types of online gambling such as online casino games, slots, bingo, lotteries, and sweepstakes. Betting on horse races, spread betting, pool betting, dog racing, and Bitcoin or cryptocurrency-based gambling are also prohibited.

Are there any server location requirements?

What are the challenges of entering the Cyprus gambling market?

Financial commitments, stringent regulatory standards, and establishing compliance infrastructure.

How does Cyprus's regulatory framework promote responsible gambling?

Through rigorous player protection measures, public awareness campaigns, and operator guidelines.

What is the significance of the paid-in capital requirement?

Demonstrates financial stability and commitment to the Cyprus gambling market.

Are there any Responsible Gambling obligations?

• There are requirements for self-exclusion that need to be disclosed 24 hours after it is requested.
• Adherence to the protocols of each market you enter into and its terms.
• Implementation of responsible gambling tools, such as the ability for players to set deposit limits, wager limits, cooling-off periods and session limits, is mandatory.

What ongoing obligations do licensed operators have in Cyprus?

Compliance with regulatory updates, financial reporting, and maintaining operational standards.

Are there any requirements for player complaints procedures?

Licensees must adhere to the following protocols:
• A clear internal complaints process
• Protocols for responding to the complainant promptly
• Ensuring record retention of complaints
• Providing escalation process
• An approved Alternative Dispute Resolution (ADR) mechanism for escalated complaints
• Upon request, the NBA reserves the right to request KYC information that the licensee holds for the complainant in the event that complaints are escalated to the NBA mechanism for resolution.

Are there requirements to segregate player funds?

Yes. Licensees are required to segregate player funds from operational funds. Player funds should be held in a separate account.

Corporate Structure

Leveraging Alderney and Cyprus for Global Gaming Operations

This strategic corporate framework utilises the jurisdictional strengths of Alderney and Cyprus to enhance regulatory compliance and optimise financial operations, focusing on tax planning and market diversification. The setup showcases a strategic alignment between an Alderney Gaming Company, holding an Alderney gaming license for non-Cyprus related gambling activities, and its wholly-owned subsidiary in Cyprus, established to secure a Cyprus Class B sports betting license.

Creating a subsidiary in Cyprus aims to leverage the sports betting market within Cyprus under the Class B license framework. This approach allows the parent company to benefit from Cyprus’s advantageous tax regime, facilitating effective tax planning and financial optimisation between the two jurisdictions. The Cyprus operation complements the company’s broader strategy by providing a tax-efficient base within the EU, enhancing the overall financial structure of the company.

Additionally, this dual-jurisdictional setup offers a robust platform for managing regulatory compliance and operational efficiency. By maintaining distinct operations in Alderney and Cyprus, the company can effectively navigate the regulatory landscapes of both jurisdictions, ensuring adherence to local regulations and optimising its tax obligations. This strategic separation enables the company to tailor its services and operational focus to the specific demands and opportunities of each market.

Corporate Structure - Cyprus Gambling License

Benefits of a Cyprus Betting License

Unlocking Growth and Credibility: Advantages of a Cyprus Class B Betting License for Startups and Established Operators.

For Start-ups

Regulated Market Access: Startups gain legitimate entry into one of Europe’s regulated betting markets, providing a solid foundation for business growth and customer trust.
Financial Incentives: Cyprus offers a favorable tax structure, reducing the financial burden on startups and allowing for greater allocation of resources towards development and marketing.
EU Membership Advantage: The license leverages Cyprus’s EU member status, potentially easing access to markets across the European Union, subject to regulatory compliance.
Comprehensive Regulatory Support: The Cyprus National Betting Authority (NBA) offers guidance and support, helping startups navigate the regulatory landscape and ensure compliance.
Operational Flexibility: A Class B license covers a wide range of online sports betting activities, allowing startups to diversify their offerings without the need for multiple licenses.
Enhanced Credibility: Holding a regulated license from Cyprus enhances a startup’s credibility with players, partners, and financial institutions, crucial for building trust and establishing a market presence.

For Existing Gaming Companies

Market Expansion: For operators looking to broaden their geographical reach, the Cyprus Class B license opens up opportunities within the lucrative Cypriot betting market.
Regulatory Prestige: Obtaining a license from a respected EU jurisdiction enhances an operator’s reputation, signalling compliance, reliability, and commitment to fair gaming practices.
Tax Optimisation: The favourable tax regime in Cyprus can lead to significant financial benefits, optimising the overall tax strategy for global operations.
Streamlined Operations: The ability to consolidate various online betting activities under one license simplifies operational processes and regulatory compliance.
Strategic Partnership Opportunities: Access to the Cypriot market can foster partnerships with local and European entities, broadening business opportunities and networking.
Risk Management: Cyprus’s clear regulatory framework assists in managing legal and financial risks, particularly in the dynamic field of online betting, providing a stable environment for business growth.

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