A desperate plea by the Nicosia Race Club that its future is at risk if the gambling reform bill is allowed to proceed in its present form has led members of the House Finance Committee to express their reservations against the bill with a good chance that it will be broken up into pieces to satisfy all the pressure groups.
HFC Chairman Aristos Chrysostomou told reporters that the bill will not pass in its present form following strong opposition from the Nicosia Race Club, the Ayios Domethios Municipality, a number of betting companies, OPAP and social groups among many.
The amended gambling law allows all types of fixed odds bets to be carried out including on foreign horse races electronically or through branch network and at the same time it scraps the 25% bet tax paid by punters on fixed odds and 10% on local horse races. According to the bill, the companies managing the bets will pay 15% on gross bets to the state.
Opposition camp
The Greek gaming organisation OPAP is opposed to the bill because of its clause allowing for electronic betting, something that OPAP officials say will jeopardise the bilateral agreement signed between Cyprus and Greece.
OPAP has a network of 330 branches island wide and through a bilateral arrangement signed between Cyprus and Greece has a monopoly on lotto, Greek football and other games earning millions of pounds in revenue.
The Nicosia Race Club is opposed to the bill because it would allow fixed odd bets on foreign horse races and at the same time liberalise the local horse races. The NRC wants to oversee all betting on local horse races and maintain the official ban on foreign horse racing with officials concerned that if local punters are allowed access to foreign races, then there will be no money left for their 20 or so weekly fixtures.
OPAP and the NRC are also afraid that since bets will be allowed to be placed electronically, they will lose their monopoly and thus their power to control the flow of bets, ignoring at the same time that people can easily open accounts abroad and place bets through the Internet, and even more worrisome for some, Greek Cypriots routinely cross to the north to place their bets through betting companies operating in the occupied areas and paying no taxes to the government.
The NRC claims that up to 250 jobs will be affected from the decline in the local industry, while the investment made by some 1000 horse owners will be negatively affected.
More opposition has also come from the Municipality of Ayios Dhometios, which says it will lose CYP 500,000 worth of revenue every year as its share of revenue from the NRC is affected.
The NRC has also charged that the foreign expert brought in by the government to help in the drafting of the bill has a conflict of interest since he also acts for Ladbroke’s, but it has not substantiated the claim.
The British based ‘Pipestone Allen’ with their Cypriot associates, KIM Consultancy were awarded the contract to help the Ministry of Finance draft the reform bill.
Stamping out the illegals
The Ministry of Finance says that if the bet tax is scrapped, the state will lose CYP 3.5 mln in tax revenue, but as the incentive to bet illegally or through the occupied areas is reduced, then the government reckons that its revenue will climb as more people go legitimate.
Its worth noting that according to government statistics, during the previous World Cup games, four in every five pounds worth of bets was placed illegally to escape the 25% bet tax paid by punters.
Break into two
In an effort not to allow the forthcoming World Cup games to turn into another fiasco, HFC Chairman Aristos Chrysostomou said that since all the parties are opposed to the bill in its present but in an effort not to delay passage of the bill on the more pressing aspect of football bets, the HFC is considering the option to break the bill into two, so that the football bet tax reform may be passed on April 13, 2006 when the House plenum will meet for the last time before it is dissolved before the elections.
Chrysostomou said that while some of the concerns made against the bill are justified, but one cannot ignore the fact that the majority of bets are placed illegally and more is lost as punters head to the Turkish Cypriot side to place their bets.
Underage
One of the key advantages of the amendment apart from the introduction of a legal betting framework is that there will be stiffer penalties for those involved in illegal gambling.
According to a market research compiled by AC Neilsen on behalf of the Association Opposed to Social Problems, the number of underage persons now betting is sharply on the rise. The Association Chairman Nicos Rosos said the gallop, based on 1010 households found that 3% of teenagers aged between 12-17 bet on a daily basis, 34% at least once a week and 26% at least once a month.
“At least 1% of teenagers bet up to CYP 75 a month,” the survey found.
