The sports betting industry in the Republic of Cyprus produced solid results in 2021, propelled by a strong fourth quarter. It was able to reach pre-COVID-19 levels, but sanctions against Russia may stop the rebound.
In 2021, Cyprus was able to find substantial revenue from its sports betting segment. The National Betting Authority (NBA) reported yesterday that tax revenue increased as the year progressed. That’s a good sign. But it may just be temporary.
In the fourth quarter of last year, bookmakers in Cyprus showed an income of €226.3 million (US$251.8 million), according to the NBA. This is a 16% year-on-year increase that contributed significantly to their overall €738.5 million (US$821.8 million) for the year.
The amount is about €160 million (US$178.06 million) more than a year earlier. It was also an increase from the results of the previous quarter and about €22 million (US$22.48 million) more than in 2019.
But Cyprus has joined other European Union (EU) countries in condemning Russia for its invasion of Ukraine. As a result of sanctions against Russia, some believe the Cypriot economy may suffer another recession.
Fast-Paced Recovery May be Short-Lived
The fourth-quarter performance may have delivered enthusiasm for a strong recovery, but it’s too soon to celebrate. Cyprus has a significant contingent of Russian residents and investors, and this alliance is now under threat.
This past February, Cyprus sided with the EU to support sanctions against Russia. Banking and travel between the two countries stopped. In addition, several Russians living in Cyprus have had their bank accounts frozen.
As a result, Russian business owners assert that the sanctions will drive the local economy further down. They warn of a deeper recession and are lobbying the government to reverse its stance.
The Russian-speaking community has been supporting the country’s economy for many years, investing in key sectors, paying taxes on time and in full. At the same time, Russian-speaking residents are an important and integral part of society, participating in its social and cultural life,” states a group of Russian business owners in Cyprus.
Cyprus has been planning on relying on its ties with Russia, to some degree, to help support the expansion of its casino industry. Previous reports indicated that this sector may suffer as well if the sanctions linger.
Some Cypriots aren’t convinced. There have been reports this week, in both the news and on social media, that consumer products have been improving since the sanctions began. As a result, spending is up and consumer satisfaction is on the rise.
Cyprus Sports Betting Growth
Cyprus collects 3% of sports betting operators’ net revenue, as well as 10% in taxes. As a result, the operators gave the country a total of €12.87 million (US$14.33 million) combined in taxes and contributions.
The contribution supports several local causes. 1.5% goes to the National Football Federation, and other sports federations in Cyprus share another 0.5%. The last 1% gives the NBA funds with which it can develop gambling harm awareness and treatment programs, as well as initiatives to prevent gambling by minors.
NBA President Ioanna Fiakou showed enthusiasm for the results, especially for those in the last quarter of the year. She asserted that the revenue shows the sports betting sector is on the rebound at a fast pace, and that Cyprus will continue to see greater growth.
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