Cyprus Lawmakers Approve Increased Levy On Gaming Operators

Cyprus’ parliament has narrowly approved a bill increasing the levy on licensed betting operators from 3% to 4.5% of their net earnings. The additional revenue generated will be directed toward supporting local soccer clubs and their youth academies. Managed by the Cyprus Sports Organization (CSO), the funds will be allocated to the Cyprus Football Association (CFA) to benefit 97 clubs across various leagues.

While some see the new measure as a lifeline for Cypriot soccer, it has sparked considerable debate, particularly around financial accountability and club tax debts. Critics argue that the increased levy rewards clubs that have long struggled with financial mismanagement, including accumulated tax debts estimated at over €32 million.

A recent report from the Audit Office revealed that many clubs still need to meet existing repayment agreements, with new debts continuing to pile up for 14 out of 19 indebted clubs. This pattern of non-compliance has fueled criticism that the additional funding may not address underlying issues of financial instability.

Key concerns raised by critics include:

• Financial mismanagement and accumulated tax debts of clubs.

• The potential ineffectiveness of additional funding to resolve structural financial issues.

• Risks of rewarding clubs that fail to meet repayment agreements.

Aristos Damianou, an MP from the Akel party, called for stricter conditions to accompany the funding, emphasizing the need for clubs to demonstrate transparency and accountability. Similarly, Green Party MP Stavros Papadouris urged the government to focus on teaching clubs proper financial management to ensure they operate sustainably over the long term.

Concerns have also emerged regarding the potential conflict between the new measure and European Union regulations on state aid. EU laws prohibit direct financial support to private enterprises, such as soccer clubs, raising questions about whether the levy’s intended use could face legal challenges. Independent MP Alexandra Attalides echoed these concerns, questioning the fairness of offering financial support to clubs that fail to meet their fiscal obligations. She noted that such policies risk negatively impacting other businesses that operate responsibly.

Supporters of the bill emphasized:

• The necessity of funding for the survival and growth of Cypriot soccer.

• Reinvesting betting profits into the sport as a fair return to the clubs generating revenue.

• Using the funds to develop youth academies and strengthen local leagues.

Proponents of the bill defended the measure as necessary for the survival and growth of Cypriot soccer. Diko MP Christos Senekis argued that soccer clubs generate significant betting activity but receive minimal benefits in return. He described the increased levy as a fair way to reinvest profits into the sport. Disy MP Haris Georgiades also supported the legislation, framing it as an investment in sports development. However, he emphasized the importance of stricter tax collection measures to prevent further financial mismanagement among clubs.

Implications and oversight considerations include:

• Ensuring compliance with EU state aid regulations.

• Maintaining transparency and fiscal responsibility among clubs.

• Balancing funding allocation with accountability measures.

The approval of the bill highlights the complex relationship between the gaming industry, sports organizations, and government oversight in Cyprus. While the levy increase provides much-needed funds for soccer clubs, it also raises concerns about fiscal responsibility, transparency, and compliance with broader EU regulations. For now, lawmakers remain divided on whether the measure will deliver sustainable results or further exacerbate existing financial issues.