Betfair claims that Cypriot gambling laws are against the free market principles of the European Union. The company lodged a formal complaint to the European Commission (EC) on Monday, 10th September, 2012.
Betfair says the new gambling law adopted in July 2012 in Cyprus may actually unable the legal operation of betting exchanges in Cyprus. On top of making bet exchange virtually impossible, the new legislation additionally prohibits cash betting transactions by operators.
What is a bet exchange? A bet exchange is basically very similar to the case when you make a bet with someone. „Let’s bet $10 that this horse runs faster than that one” is an exchange bet. There’s a contract (about the running of horses) and there’s a result that can only be binary. Don’t be afraid, it means either this horse or that horse wins.
Therefore the winning (and also the payoff) is either some fixed amount of money. In our case you either win $10, or lose your money totally. The payoff would be $20 (minus the betting fee or commission if they are involved). Betting exchanges are usually involved around sporting events or elections and they play an important role in the internet betting in Cyprus.
The key thing in betting exchanges is that the better needs to find someone who counters their bet. To offer services that enable players to do so, Betfair launched what they originally called „open-market betting” in June 2000. The name was quickly replaced by the industry, to „betting exchange”.
According to the Betfair’s complaint „any attempted ban on betting exchanges is a discriminatory and disproportionate breach of EU law as it may apply only to exchange providers, with all other sports betting products remaining unaffected”. The company hopes to hear some positive Cypriot gambling news and continues its operations in Cyprus during its complaint are answered by the European Commission.