As the law stands now, a limited liability company that is registered in Cyprus with exclusive purpose to operate as betting company and accept collective bets and it's issued and paid up share capital is minimum €170.100 it can apply to the Cyprus Ministry of Finance to obtain a licence to operate as a betting provider company.

A.          Requirements to obtain a betting provider licence

The application to obtain such a licence must be filed until the 30^th of September of each year and it is issued by the Minister of Finance.

In order for the licence to be issued an amount of €8.543 shall be paid by the applicant simultaneously with the deposition of the application to the Ministry of Finance.

Further, the requirements needed in order for a betting licence to be issued are:

a) The applicant company should be registered in Cyprus according to the Companies Law Cap.113.

b) An agreement between the applicant company and the betting company of which the applicant is representative should be presented. The said agreement shall state that the applicant company is duly authorised by the betting company to act as its representative and accept on its behalf and for its account collective bets.

c) The applicant shall submit a bank guarantee from a Cyprus Commercial Bank for an amount of money defined by the Minister of Finance and which cannot in any way be less than €340.000. Pursuant to the Bank Guarantee, the Bank undertakes to pay any amount of money to any person who participated in a betting game and won. According to the law under certain circumstances the submission of the said Bank Guarantee might not be necessary.

d) The applicant shall submit a bank guarantee from a Cyprus Commercial Bank for an amount of money defined by the Minister of Finance and which cannot in any way be less than €51.260. Pursuant to the Bank Guarantee, the Bank undertakes to pay any amount of money to the Government of Cyprus that the applicant is obliged to pay as taxes according to the Law.

B.          Online Betting - legal gap in Cyprus

On the other hand, there is not any law - regulations regarding online betting and/or gambling and the requirements for someone to qualify for a licence to operate and/or promote such kind of games are not clear.

However, a Bill is currently prepared, by the House of Representatives, that will regulate online betting and offer control over gambling but it will not ban it.

This is something that has to be done because according to European Law (Cyprus is member of the European Union since May 2004) it is very difficult to ban online gaming, because it affects the free movement of services.

However, justified restrictions to the free provision of services could be compatible with European Law under certain circumstances.

It remains to be seen when and whether the said Bill will become an Act and how it will regulate the said section of services.

C.          European case law - developments on licences and restrictions on online games

The European Commission ruled that Greek Law Number 3037, which effectively banned all electronic games in public places, was not compatible with the provisions of the EC Treaty. The law had been introduced in an attempt to stamp out illegal gambling, with offenders facing fines of €5,000 to €75,000 and imprisonment of 1 to 12 months.

On February 2005, the European Commission referred Greece to the European Court of Justice over its ban on electronic games for infringing Union regulations on the free movement of goods and services.

On October 2008 Yves Bot, ECJ's Advocate General, in the Case C-42/07 brought before the European Court of Justice by the Criminal Court of First Instance of Porto in a case opposing the Liga Portuguesa de Futebol Profissional (the Liga) and Baw International Ltd (Bwin) against Portugal's Santa Casa da Misaricordi de Lisboa (Santa Casa) with his opinion he actually reaffirmed that justified restrictions to the free provision of services for public order purposes are compatible with EU law.

D.          Conclusion

Conclusively, as the law stands now it is to be said that a Cyprus Company can, under certain circumstances and if it fulfils the requirements set by the law, obtain a licence to operate as a betting provider.

On the other hand due to the gap in the Cyprus Law regarding the matter of online betting it contains risks for someone who wants to proceed with it.