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New Legislation Under Way

Following the relevant Council of Ministers Decision in 2013 for entrusting to the Ministry of Energy, Commerce, Industry and Tourism, the task of licensing a single Integrated Casino Resort in Cyprus, on 23 December 2014 the Cabinet of Ministers forwarded to the Cyprus Parliament a bill governing the establishment, operation and monitoring of casinos in Cyprus.

The proposed legislation will govern the operation of what is aimed to one of the leading Integrated Casino Resort in Europe and amongst the best in the world. The key policy decisions behind the new legislation are to control, limit and strictly regulate casino gaming in the Republic of Cyprus, to combat criminal activity in gaming and channel consumers wishing to game at a casino away from illegal and unregulated establishments, and to protect consumers, minors and the vulnerable. To support the successful licensing of a single integrated casino resort which meets the strategic objectives of the Government, as outlined above, the following policy decisions have been formed: A single integrated casino resort will be licensed.

The licensee shall have the option to request that up to four additional locations in different districts will be licensed for the operation of up to 50 machines per location representing 2.5% of the maximum allowable number of machines at the integrated casino resort. Such locations will be licensed by the CGC and operated by the integrated casino resort operator in a way to be considered promotional/supportive to the operation of the main resort.

The integrated casino resort shall be world class and include not only a resort hotel and casino, but a blend of attractions and activities so as to be internationally recognised. Only the integrated casino resort shall be permitted to offer casino table games and gaming machines under the legislation. There is a minimum requirement of 100 tables and 1,000 machines. There is also a maximum allowance of 200 tables and 2,000 machines. Sports betting, lotteries, horseracing and online gaming will not be included as part of this legislation and shall continue to be addressed by existing legislation.

The term of the license will be 30 years, renewable following a request to the CGC of the holder, anytime after 15 years for a further agreed term. The operator will be given a 15 year exclusivity period, during which the Government will not grant another casino license in the Republic of Cyprus. This exclusivity period commences from the date of the grant of the license. The selection of site for the integrated casino resort will be left to the open choice of the bidder. The Government will seek to fast-track planning applications made for the integrated casino resort recognising the importance of the project. Decisions will be made and communicated to the operator within three months of application and provision of all required documentation and information.

The Casino Gaming Commission will be formed as an independent public law legal body and be responsible for Regulation, Auditing, Revenue Collection and Enforcement. A gaming duty rate of 15% of gross gaming revenue is proposed. No deductibles will be allowable against gaming duty (other than an allowance for uncollected gaming revenue) and a single rate will be applied on all casino gaming activity including casino games and gaming machines. The CGC will perform comprehensive due diligence on the operating license applicant and its significant shareholders (10% if a publicly listed company and 5% if a private company, natural person shareholders or other), key management, contractors, suppliers and associated persons, prior to granting the license. Smoking and alcoholic beverages will be permitted on the gaming floor and at gaming positions.

The minimum age for admission to casino gaming shall be 21. Persons under 21 years of age may pass through the gaming floor on a designated path but shall not be allowed to attend gaming positions. The integrated casino resort may operate 24 hours per day, seven days per week. Any requirement for an entrance fee or membership by the integrated casino resort operator on casino customers is subject to the prior written approval of the CGC. EU compliant Anti Money Laundering (AML) procedures will be required by the legislation and the Regulations at all times. Credit may be provided for gaming and will be closely monitored and regulated by the CGC. Junkets shall be allowed in the legislation, and shall be defined, licensed and regulated by the CGC in accordance with strict regulations.

Junkets will be allowed to provide credit to casino customers if licensed and compliant with Regulations. Complimentaries will be permitted (free or discounted travel, accommodation, food and beverage and entertainment offered to casino guests), but will be defined, restricted and reported as set out in the Regulations. Advertising will be permitted, for the integrated casino resort, both within and outside Cyprus, in accordance with the requirements in the Regulations and current advertising law. Marketing should be consistent with promoting the integrated casino resort as a whole, and not the gaming activities on a standalone basis. Responsible gaming will be closely monitored. Policies and practices to deal with problem gambling and support responsible gaming by customers shall be required of the operator in the primary legislation and set out in more detail with specific minimum requirements in the Regulations.

The operator will be required to have policies and a programme of responsible gaming measures approved and monitored by the CGC. The CGC will monitor the compliance to the requirements of the gaming licence, and will be empowered to investigate the integrated casino resort license holder, hold hearings and impose administrative sanctions for breach of the Law, Regulations and integrated casino resort license.

A competitive and transparent two stage procedure will be employed to select the single licensee. The process will comprise a pre-qualification stage where the expression of interest will be requested and a subsequent full request for proposal (“RFP”) stage, where the three prequalified candidates will be invited to participate as they shall occur as a result of the evaluation at the first stage.

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