Cyprus has taken a significant step to boost the funding of local football clubs, passing a bill to raise the levy on sportsbook winnings. The new legislation will increase the tax on net earnings from licensed betting operators, with the goal of supporting professional football and youth academies.
The increase, which moves the betting tax from 3% to 4.5%, is expected to generate millions of euros that will be allocated to the Cyprus Sports Organisation (CSO). The CSO will funnel these funds directly to the Cyprus Football Association (CFA), which will distribute the financial aid to 97 local football clubs and their academies across the country.
While this move has been celebrated as a much-needed boost for the sport, it has also sparked considerable debate. Critics argue that it doesn’t address the pressing issue of football clubs’ growing tax debts, with the country’s clubs currently owing €35.6 million ($37.3 million). The additional revenue raised by the new levy is intended to help clear some of this debt, but opponents question whether it will be enough to solve the long-standing financial troubles of the clubs.
The Debate Over the New Levy
The bill passed with broad support from the Ethnikó Laikó Métopo (ELAM), Dimokratikós Sinagermós (DISY), and Dimokratikós Kómma (DIKO) parties, with 27 votes in favor. However, 25 lawmakers voted against the measure, raising concerns over its impact on competition between clubs and its compliance with European subsidy regulations.
The increased levy will apply to both land-based and online sportsbooks, which have become an increasingly important revenue source for Cyprus. In 2024, betting revenues are expected to reach €150 million ($157.4 million), with the government set to receive €15 million ($15.7 million) from the tax, while sports federations will receive €2 million ($2.09 million).
The key argument in favour of the new bill is that the additional funds will be channelled into the development of football in Cyprus, particularly youth football. By allocating money to the CFA, the government hopes to strengthen local clubs, provide better training facilities, and improve the overall standard of the sport. This could benefit future generations of players, ensuring that Cypriot football remains competitive on the international stage.
However, the new bill has faced strong opposition from critics who argue that it doesn’t go far enough in tackling the debt crisis within the football industry. Independent MP Alexandra Attalidou has been vocal about her concerns, arguing that the new levy could breach European competition rules. She also questioned whether it was fair to reward football clubs that had failed to comply with the state’s debt repayment schemes.
Tax Debts and Responsibility
One of the most contentious aspects of the new bill is its failure to address the substantial tax debts that local football clubs currently owe. The €35.6 million ($37.3 million) in accumulated debt is a significant burden on the clubs, and critics argue that it undermines the spirit of the new legislation. These clubs have been given until June 2037 to settle their debts, but some are struggling to meet their obligations.
DISY MP Haris Georgiades pointed out that a large portion of betting activity in Cyprus revolves around foreign football leagues, rather than local competitions. He emphasized that all clubs should be held accountable for their financial obligations, noting that AEK Larnaca is a prime example of responsible management, as the club has no outstanding tax debt.
This point was echoed by Stefanos Stefanou, the General Secretary of AKEL, who highlighted that five clubs have failed to make any payments under the latest repayment scheme. He warned that these clubs are creating a “bubble” that will inevitably burst, potentially threatening the stability of the entire sector.
The Future of Betting in Cyprus
With the new bill in place, the landscape of sports betting in Cyprus is expected to change. The increased levy will provide a much-needed injection of funds into the football sector, but whether it will be enough to address the broader financial challenges facing Cypriot football remains to be seen. For now, the focus remains on whether the new funds will lead to significant improvements in the standard of the sport and whether clubs will finally start to meet their tax obligations.
As the country’s betting revenues continue to rise, lawmakers and stakeholders will need to carefully monitor the situation to ensure that the new funding structure truly benefits local clubs and helps to alleviate the burden of unpaid taxes.
