Cyprus Parliament to Vote on Casino Cash Exemption Amid Concerns Over Money Laundering

While it is no longer possible to purchase real estate, cars, or yachts with large amounts of cash, a proposed exception could allow casinos to continue accepting cash transactions exceeding €10,000 if the measure submitted for a vote in the Plenary Session of the Parliament this afternoon is approved. The European regulations set to take effect in July 2027 will prohibit all cash transactions over €10,000. However, Cyprus implemented the restriction early, with the ban coming into force on January 1, 2025, following its adoption by Parliament in December 2024. The law proposed today seeks an exemption solely for casinos, arguing that such a provision is "deemed necessary for the smooth operation of casinos," as they are highly cash-intensive businesses that require a transitional adjustment period until 2027.

The MPs backing the proposal, Nikolas Papadopoulos (DIKO), Marinos Mousiouttas (DIPA), Efthymios Diplaros (DISY), and independent MP Andreas Themistocleous, contend that these restrictions are not present in other EU member states and could negatively impact investment in Cyprus. They also warn that tightening regulations may push players toward the occupied territories, where casinos operate with significantly looser controls and little oversight.

Speaking to Economy Today, Haris Tsangaridis, Executive Director of the Gaming and Casino Supervision Authority, clarified that the proposed exemption does not equate to a relaxation of anti-money laundering controls. He stated, "Anyone who uses more than €2,000 at the casino undergoes a KYC (Know Your Customer) check, which includes a global background check. Depending on their investment profile, a source of funds or source of wealth verification may also be conducted. Additionally, inspectors from the Authority are present on-site 24 hours a day." When asked about a new customer arriving with €20,000 in cash, Tsangaridis explained, "When someone enters with an amount exceeding €2,000, identification and verification procedures are followed. We conduct immediate checks in the world check system for any negative records and request documentation verifying the origin of the funds. This is part of the source of funds or source of wealth process, depending on the customer's risk profile. Based on their profile, betting limits may also be imposed." Addressing concerns about money laundering, he emphasized that casinos do not allow individuals to deposit cash, convert it into chips, and then request a bank deposit without wagering. "This is a classic way of laundering and is not allowed. If you enter with cash, you leave with cash. If you enter with a check or bank transfer, you leave the same way. The profit receipt issued clearly reflects the difference between entry and exit. So, if someone enters with €20,000 and leaves with €20,000, they cannot claim profits. If they have winnings, say €2,000, this will be explicitly recorded."

Despite the casino sector’s push for an exemption, key financial and regulatory bodies have expressed strong opposition. The Parliamentary Committee on Institutions sought input from various stakeholders last week, and their official responses have been submitted in writing. MOKAS, the anti-money laundering unit of Cyprus, reiterated its firm stance against cash transactions, emphasizing that cash poses a significant risk for money laundering. The organization also highlighted the absence of an updated National Risk Assessment that accounts for casinos. Similarly, Tax Commissioner Sotiris Markides stated, "It is a matter of principle not to agree with any changes that increase cash transactions," citing concerns over tax evasion and illicit financial activities. The Cyprus Securities and Exchange Commission raised legal concerns, questioning whether such an exemption aligns with European law. In a letter to Parliament, the Commission pointed to Regulation (EU) 2024/1624, which explicitly discourages exemptions for high-risk industries like casinos. The Cyprus Bar Association echoed these concerns, arguing that the proposal violates the principle of equality and raises constitutional issues by granting preferential treatment to a single sector. The Association also warned that this move could expose the Republic of Cyprus to scrutiny at the European level.

According to figures submitted by the casino itself to the Institutions Committee, cash transactions exceeding €10,000 amounted to €237 million in 2024. Notably, 38.8% of these funds came from players of Israeli origin, 32.7% from Cypriots, and the remainder from other nationalities. The average buy-in for transactions over €10,000 stood at approximately €29,500 per visit, while the average buy-out was €30,446. However, these numbers appear to contradict data from the Customs Department, which recorded only €667,491 in declared cash entering the country for casino purposes in 2024. This raises a pressing question: how did more than €150 million in cash—excluding amounts from Cypriot players—enter the Republic of Cyprus?

In response to these concerns, the Customs Department has clarified that the proposed amendment does not fall under its jurisdiction, meaning it has no formal stance on the matter. However, it has implemented stricter measures to address the inflow of undeclared cash. In a letter to the Chairman of the Institutions Committee, the Customs Department outlined the following actions: intensifying inspections at all entry and exit points of Cyprus, including airports and ports, to detect undeclared cash amounts of €10,000 or more, and formally requesting the Cyprus Gaming and Casino Supervision Authority to notify the Customs Service whenever an individual enters a casino with over €10,000 in cash without prior declaration, allowing enforcement measures to be taken.

The current proposal before Parliament seeks only a temporary exemption until 2027, but it provides no plan for what will happen afterward. One certainty is that the European regulation prohibiting all cash transactions over €10,000 will take full effect in July 2027, explicitly covering casino activities. Supporters of the exemption argue that without special allowances for casinos, players will migrate to the occupied territories or other jurisdictions with weaker oversight, creating de facto “gray zones” that undermine anti-money laundering efforts. This raises a critical question: beyond the short-term solution of a two-year extension, how will the casino business model in the Republic of Cyprus adapt to the inevitable full enforcement of the EU-wide cash transaction ban in 2027?

By fLEXI tEAM