THE NEW gambling law is discriminatory, disproportionate and in violation of EU laws, according to one company that has had to close down 16 shops providing online casino and slot machine services. 

A lawyer for the Cyprus-registered AA Crown Bet Ltd which represents the interests of a number of big gaming companies in Ireland and Malta said the company is considering suing the Cyprus Republic, reporting it to the European Commission and appealing to the European Court of Justice (ECJ) over the new law recently implemented. 

Speaking to the Cyprus Mail yesterday, Yiannos Georgiades from the Nicosia law firm Georgiades & Mylonas argued that the new gambling bill violated provisions on the free movement of goods and services and freedom of establishment in the EU Treaty. 

According to Georgiades, AA Crown has 16 shops, mostly in Limassol offering online casino and slot machine services, provided through agreement with companies operating in Ireland, England and Malta. 

However, sections 78 and 79 of the much-debated gambling law passed unanimously by parliament on July 6, specifically prohibit these services, meaning that all 16 shops no longer operate. 

“The government could regulate and tax these services like other countries do, for example, the UK, Ireland, Malta and Spain,” said Georgiades. 

He argued that the European Commission’s policy on the matter is to try to avoid a complete prohibition

In a recent Green Paper (a discussion document intended to stimulate debate and launch consultation), the Commission tried to encourage regulation rather than restriction of online gambling, said the lawyer. 

“The Commission tries to remove obstacles to restrictions on gambling,” said Georgiades.

Arguing his point, he noted that when Greece tried to justify prohibition using the argument of fighting crime, the Commission referred to the ECJ position that any restrictions which seek to protect general interest objectives such as the protection of consumers must be “consistent and systematic” in how they seek to limit gambling activities. 

“A member state cannot invoke the need to restrict its citizens’ access to gambling services if at the same time it incites and encourages them to participate in state lotteries, games of chance or betting which benefits the state’s finances,” said the ECJ.  

“The gist here is that you cannot restrict provision of services from one company established in one member state to another because it contravenes EU law,” said Georgiades. 

He argued that in certain circumstances it is justifiable if the restriction aims to protect consumers, prevent crime and money laundering. 

“But it has to be done according to the principles of proportionality and non-discrimination. In the case of Cyprus, it is not justified,” he said.

Georgiades pointed to the Greek state-owned betting agency OPAP, which was established in Cyprus based on a bilateral agreement between the two countries. 

“They allow OPAP to operate providing similar services while specifically prohibiting online casinos and slot machines. They offer random number games, games of chance which are very similar,” he said.

Apart from the argument of unfair advantage to existing players in the market, the lawyer also pointed to the impact on unemployment.   

“A lot of people are losing their jobs, not just my clients,” said Georgiades. 

Based on government estimates, around 1,000 online gambling shops were operating around the island before the law came into effect. Given that each shop needs an average of five to ten staff members, the lawyer argued that five to ten thousand workers were about to be added to the unemployment list. 

“Also, these companies have lost their investments,” he said, noting that companies set up here after the Attorney-general issued a legal opinion a few years back saying you can’t stop people that have agreements with service providers from other EU member states, like Malta for example. 

AA Crown is currently examining the possibility of a lawsuit against Cyprus, filing a complaint to the European Commission, and going to the ECJ. 

In the meantime, Georgiades explained that any shop that is prosecuted by the state for continuing to operate will have the opportunity to refer the matter to the ECJ for a ruling. 

Police issued a warning last Friday that the new law will be implemented without delay. The new law makes possession and/or operation of devices for the purposes of running an online casino illegal, while also prohibiting the advertising of illegal gambling. 

Police highlighted that many provisions in the new legislation provide for penalties of up to five years in jail and/or a €300,000 fine. 

Criminal responsibility now lies not only with those owning or running gambling joints but also the gamblers, said the police. 

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