The restriction on cash transactions for amounts over €10,000 and why the casino should be exempt

The House of Representatives’ Standing Committee on Institutions recently discussed an amendment which provides for the exemption of casinos from the restriction on cash transactions for amounts exceeding €10,000.

The amendment aspires to bring about the necessary correction of a distortion created by legislation that was passed by Parliament a few months ago.

The distortion has directly impacted the operating environment of the casinos operating within the areas controlled by the Republic of Cyprus.

The amending bill is expected to be brought before the House of Representatives’  Plenary session tomorrow, Thursday, with a vote in favour considered to be imperative, since any other outcome will maintain the extremely detrimental blow to the competitiveness of the casinos and, by extension, to the local economy caused by the Legislative Body’s introduction of the €10,000 cash limit with immediate effect.

The EU Directive and the law passed by Parliament

The law was passed by Parliament last December in light of a Directive announced by the European Union in the summer of 2024, which - aiming to enhance financial transparency in the EU - prohibits cash transactions over €10,000.

It should, however, be emphasised as a significant difference that for the smooth implementation of this Directive, businesses that depend on cash were given a three-year grace period - specifically until July 2027 - to prepare for the impact of such a significant change.

Despite the three-year transitional period granted by the EU, the Cypriot Parliament instead rushed to vote on this particular law, without even consulting the affected businesses and without - by all appearances - taking into account the negative implications and consequences of its unreasonable decision, and without true direct obligation to introduce the restriction in question without warning and with immediate effect.

A blow to the City of Dreams Mediterranean’s contribution

Essentially, the only result of this hasty move by Parliament last December was none other than to place the affected businesses in Cyprus in an extremely disadvantageous position compared to their counterparts in the rest of the EU, with a classic example being City of Dreams Mediterranean, which operates in a purely "cash business" sector.

The €650 million investment, until Eurobank SA's recent investment in Hellenic Bank, was the largest FDI ever made on our island. Now, the investor, the Nasdaq-listed Melco Resorts & Entertainment, has, in essence, suddenly been faced with a change in the framework based on which it decided to invest in the country. It should also be noted that this investment had positively repositioned Cyprus on the global tourist map and beyond.

By putting the island in a position to attract high-income visitors, contributing greatly to the wider effort to address the problem of seasonality and transform Cyprus into a year-round destination. The integrated casino resort also serves the goal of boosting specialised forms of tourism such as conference tourism, while, in addition, creating over 2,000 new jobs. The integrated resort’s contribution to the development of the Cypriot economy is universally considered to be indisputable.

In addition to the above, it is worth noting, as an indication of its enormous contribution to the Cypriot economy, the fact that in 2024 alone, the City of Dreams Mediterranean paid €54 million in taxes.

In this context, and with the success of City of Dreams Mediterranean since its July 2023 opening reflected in the more than three million visitors it has attracted, as well as the millions of euros it generated in tourism revenue for the Republic of Cyprus, it is evident that the restriction on cash transactions for amounts over €10,000 comes at an unfortunate juncture in time. The action can be considered nothing less than an obstacle to the continuation and further strengthening of the integrated resort’s multidimensional contribution.

Risk of losing high-value tourists

On the contrary, since other casinos across Europe are continuing to accept and make payments for amounts over €10,000 in cash until 2027, the sudden implementation of the law in Cyprus may, as reasonably estimated by the authorities, lead high-value tourists to prefer other options, including - very often - the over 30 casinos in the occupied areas of the country, which accept any amount of cash without restrictions.

As relevant figures from the business community and tourism point out, the state's focus should be on the money coming from the occupied territories and not on the sectors that bring millions of tourists and tax revenue to the country, and which are already strictly supervised by the competent authorities.

According to the same figures within the business community, the practical result of imposing the restriction, as it was through the law passed by Parliament last December, could be emptying the island's integrated resort of visitors to the benefit of the casinos of the occupied areas or other destinations. This is why the correction promoted through the bill that will be put before the Plenary tomorrow for a vote, and which provides for an exemption for the casino is imperative.

It should be noted that the casino's request for a temporary exemption, to allow time to adapt to the EU Directive, is not unique and does not create an issue of unequal treatment vis-à-vis other economic operators, as the law already exempts certain cash transactions.

As, moreover, the management of the casino resort pointed out while speaking before the House’s Standing Committee on Institutions - and as already mentioned above -, the EU Directive essentially gave the business, which depends on cash, a three-year deadline to prepare for such a dramatic change.

The demotivating action is a bad bet 

It should not be overlooked that, with the aim of attracting investors about a decade ago for the creation of an Integrated Casino Resort (ICR), the Republic of Cyprus had proceeded to grant incentives, such as exclusivity and the imposition of low taxation (15% on gross income).

Therefore, any removal of incentives that were not previously announced or consulted over, in this case the right to use cash in transactions over €10,000, does not appear to be and indeed is not the appropriate practice for a state whose goal is generally to attract high-quality foreign direct investment.

Much more so in the case of Melco and especially City of Dreams Mediterranean, a sector of activity where cash transactions are vital to its competitiveness.

It is noted that the proposed law to exempt the casino from the restrictions on the use of cash in transactions of €10,000 euros and above was submitted by MPs Nicholas Papadopoulos (DIKO), Marinos Moushiouttas (DIPA), Efthimios Diplaros (DISY) and independent MP Andreas Themistocleous.