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Economics of Gambling in Cyprus

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Cyprus is a divided Island. The Government of the Republic of Cyprus has control over the territory of Cyprus, which consists of about 67% of its area, and is inhabited mostly by Greek Cypriots numbering 750,000 inhabitants. About 33% consists of the Northerly part of Cyprus is ruled by what is called the “TRNC” (Turkish Republic of Northern Cyprus). The figures reported here are from the area controlled by the Republic of Cyprus, however, reference to the Northern part of Cyprus drawing on material from Turkish Cypriot newspapers are also made. It is necessary to make reference to the Northern part because within a comparatively small area 22 gambling Casinos are in operation.

The Association Confronting Social Problems (SAKOP) has commissioned a socio-economic research on gambling in Cyprus, where 1010 people were interviewed between the ages of 12 – 65 years. Their results have shown that nine out of ten people has played at least one game of chance in the past. On average each person plays one game twice a week. 90% of people buy scratch cards and lotto, joker and government lottery are also popular since one in two people (including the under-age) play them. Interestingly, every sixth person played at least once in a casino on cruise boats (9% of under-age), abroad or in Northern Cyprus.

On average each person spends C£29 (50.53) per month in total for the various games they participate in (average C£6 (€10.45) to C£15 (€26.13) per month for every game). It is especially worrying that the households with the lowest income per month spend more money on gambling on average per month relative to their income level.

The under-age spend on average C£14 (€24.41) per month which is considered to be a very high level when they are often financially dependent on their parents. Furthermore, 1% of under-age 12-17 year olds stated that they spent on average C£26 (€45.34) to C£75 (€130.79) per month gambling. Below is a breakdown of the frequency of gambling amongst minors, when the question was whether they gambled at least one game, excluding the Government Lottery, the CBC Lottery and the scratch ticket:

  • 3% of 12-17 year olds claim that they gamble every day
  • 35% of 12-17 year olds claim that they gamble every week
  • 26% of 12-17 year olds claim that they gamble every month

When the same question was addressed to adults, the following answers were received :

  • 9% of adults (18-65) claim they gamble every day
  • 47% of adults (18–65) claim they gamble every week
  • 12% of adults (18-65) claim they gamble every month

The main reason mentioned by the majority is that they gamble to make money yet the majority said that in the end they become losers. The games with the highest participation are also the games with the highest losses according to their replies. The majority of the low income classes gamble to earn money. Most minors and women, however, say they gamble for fun.

The majority of the survey participants said that they considered casinos, gambling clubs, horse racing and the Internet as hard gambling and therefore they did not wish to participate, while they participated in other games that were not considered as hard gambling.

Interestingly, there was the universal admission (9 out of 10) that in the long term participation in gambling would lead to financial losses and addiction which by itself would lead to other problems, in particular social problems not only for the gambler himself but also for his family.

1 in 3 people spend C£9 (€15.69) monthly on gambling on average, whilst 5% of participants or 4% of the population spend over C£100 (€174.42) a month (up to C£500 (€872.14) per month each). Out of those aged between 12-17 years 30% spend monthly C£9 (€15.69), 29% spend C£10 (€17.44) to C£25 (€43.60), 9% spend C£26 (€45.35) to C£50 (€87.21) and 1% C£51 (€88.95) to C£75 (€130.82). When looking at the household, those earning C£500 (€872.15) to C£750 (€1,308.22) monthly, spend 27% (C£76 (€132.56) to C£100 (€174.43)) per month on gambling.

GAMING SECTOR ANALYSIS

Lotteries

The National Lottery, established in 1958, is the main gambling media in South Cyprus. The Government of Cyprus operate Weekly Lotteries, Special Lotteries and Scratch tickets.

The Cyprus Government Lottery Sales (Turnover) 2000 – 2003 in CYP (EUR):

Year : Weekly <>
Lotteries <>

  • Special <> Lotteries <> Scratch <> Tickets <> Total
  • 2000 : 2,619,250 (4,568,001) <> 1,166,500 (2,034,149)  <> 26,547,250 (46,299,667) <> 30,333,000 (52,915,404)
  • 2001 : 2,386,000 (4,162,839) <> 984,150 (1,716,970) <> 32,101,250 (55,987,218) <> 35,471,400 (61,878,557)
  • 2002 : 2,209,020 (3,854,028) <> 1,158,300 (2,019,930) <> 38,588,100 (67,301,412) <> 41,955,420 (73,191,556)
  • 2003 : 1,990,545 (3,471,639) <> 1,052,500 (1,835,032) <> 35,222,750 (61,436,748) <> 38,265,795 (66,754,258)
  • TOTAL : 9,204,815 (16,056,760) <> 4,361,450 (7,605,863) <> 132,459,935 (231,044,525) <> 115,722,948 (201,850,681)

Source: Submission to the Enquiry from Cyprus Government Lottery

There are 21 people employed full-time in the Cyprus Government Lottery. The lottery tickets are sold in bulk to registered agents with 10% discount. These agents then distribute them through street vendors, kiosks etc. There are over 40 agents in Cyprus, who employ approximately 450 sub-agents, making the total number of people employed in distribution approximately 490.

The Cyprus Government Lottery Returns to the Government 2000 – 2003 in CYP (EUR):

  • Year :  Price Money <> Administrative Expenses <> Commissions Paid <> Net Profit <> Net Profit including income from OPAP
  • 2000 :  15,271,991 (26,635,104) <> 608,845 (1,061,460) <> 3,033,300 (5,286,371) <> 11,418,864 (19,890,901) <> 17,449,106 (30,385,218)
  • 2001 :  17,595,764 (30,688,537) <> 830,322 (1,447,270) <> 3,547,140 (6,182,248) <> 13,498,174 (23,514,396) <> 21,669,902 (37,758,535)
  • 2002 :  20,571,337 (35,863,601) <> 1,000,473 (1,743,027) <> 4,195,542 (7,311,617) <> 16,188,068 (28,192,732) <> 23,317,191 (40,628,839)
  • 2003 :  19,230,680 (33,525,694) <> 893,888 (1,558,000) <> 3,826,579 (6,668,474) <> 14,314,649 (24,932,930) <> 18,719,621 (32,621,883)
  • 2004 :  n/a <> n/a <> n/a <> n/a <> 8,890,233 (32,919,201)

Source: Submission to the Enquiry from Cyprus Government Lottery

The gross profit for the Government over the four year period was C£55,419,755 (€96,650,362) or about 48%. Scratch tickets were sale leaders totalling C£132,459,935 (€230,990,506) out of overall sales of C£115,722,948 (€201,800,958) or 87%. Counteracting the decline experienced in lottery sales in 2000 was mainly attributed to the installation of 150 terminals and a Regional Data Collection Centre on the island that is directly connected with the National Data Processing Centre located in Athens. Even though the Cypriot Lottery is connected and participates in the Greek State Lottery (OPAP-Greek Organisation of Football prognostics) and it remains financially independent, the Cypriot Government believed that the direct involvement of the successful mainland lottery would be good for sales. A comprehensive software package ensures that even though the players in Greece and Cyprus share the winnings, the prizes are paid out in different currencies and with no money transfers between the countries.

Cypriot Government Lottery GGR 2000 – 2004 (in CYP and in €):

  1. Year : Government Lottery GGR (in CYP) <> Income from OPAP (in CYP) <> Total (in CYP) <> Government Lottery GGR (in €) <> Income from OPAP (in €) <> Total (in €)
  2. 2000 : 12,027,709 <> 6,030,137 <> 18,057,846 <> 20,927,853 <> 10,492,257 <> 31,420,110
  3. 2001 : 14,328,495 <> 8,171,475 <> 22,499,970 <> 24,931,151 <> 14,218,121 <> 39,149,273
  4. 2002 : 17,188,541 <> 7,129,093 <> 24,317,634 <> 29,907,546 <> 12,404,408 <> 42,311,954
  5. 2003 : 15,170,102 <> 4,404,972 <> 19,575,074 <> 26,395,522 <> 7,664,519 <> 34,060,042
  6. 2004 : 13,380,610 <> 6,279,213 <> 19,659,823 <> 23,281,860 <> 10,925,642 <> 34,207,502

Source: Submission to the Enquiry from Cyprus Government Lottery

During August 2003 the Cyprus Government Lottery awarded Creative Games International a two-year contract to supply 94 million instant lottery tickets.

There are no VAT or gambling specific taxes levied on operations of the Cyprus Government Lottery or OPAP. The annual license fee is CYP£1.00 (€1.74) paid by street vendors in order to have the right to sell lottery tickets. The duration of this license is one year. OPAP or its agents pay no license fees.

© European Union

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