Cyprus opens largest casino in Europe

There in the south of Cyprus, a few kilometers from the sea, vineyards and lemon trees have disappeared under bulldozers, while hundreds of workers are building the City of Dreams, a luxury hotel and casino that is considered “the largest in Europe “.

The American Grant Johnson, delegated to Limassol, the second largest Cypriot city after Nicosia, of the Hong Kong-based “Malco” Group, which is building its first project in the European Union, oversees the implementation of the 16-storey complex, three swimming pools, nine restaurants, cafes, a park and an amphitheater. .

Johnson claims that the 7,500 square meter casino will be “the largest in Europe” and will have “a thousand slot machines, a hundred card tables” and a room for VIP players.

But “City of Dreams”, the first project of this size in the south of the island, could cause a new conflict between the two parts of Cyprus, the northern third of which has been occupied by the Turkish army since 1974, in response to ‘ a coup that tried to connect the island with Greece. Despite the failure of the coup, the Turks remained, and the northern part soon announced the establishment of the “Turkish Republic of Northern Cyprus”, recognized only by Ankara.

There are 34 casinos in the Turkish Republic of Northern Cyprus on which it depends for large tourist imports.

Despite this, the south of the island hopes to make the “City of Dreams” an attractive center to develop the sector and attract more tourists, at least an additional 300,000 people, according to the government supporting the project announced in 2019.

But Melko has faced a series of setbacks. The COVID-19 pandemic delayed the opening of the City of Dreams, which has been postponed until the end of 2022. The war in Ukraine also shook the cards.

This project bets especially on Russian tourists, for whom Cyprus is one of their favorite destinations. With Western sanctions against Moscow over its war in Ukraine, the Russians were denied direct flights to the small Mediterranean island.

Despite those setbacks, the developers of the project hope to destabilize the Turkish Republic of Northern Cyprus’ control over the region in the region as soon as it opens.

suspicious business

With this casino, Marie Rodon, a researcher specializing in gaming gambling facilitator at the Sorbonne, says the island will be in a “somewhat exceptional situation” with potential capital inflows from Asia, Turkey, Russia, Europe and the Middle East.

However, it claims that “the more diversified the sources of funds, the more they circulate, and it becomes possible to carry out more suspicious acts, such as money laundering.”

A money laundering specialist in the Republic of Cyprus, who chose not to disclose his name while sitting in a noisy cafe in Nicosia, said casinos in Cyprus were a “sensitive issue”, and if much is said about it, “we run the risk of getting into trouble.” “Until 2015, casinos in Cyprus were banned and the Orthodox Church opposed its establishment,” he explained.

Legalizing casinos has not been easy. In addition to the very influential Orthodox Church, a section of the population opposed it, including former president Demetris Christofias (2008-2013), who linked it to “corruption”.

“After the economic crisis in 2013, large groups contacted the government, which decided it was a good time to open a casino,” adds the man, who works in the banking sector. “We are worried because we are not ready for what comes with casinos: the parallel economy and money laundering … We are turning a blind eye because we are a member of the European Union, so we dare to pay dearly for it. We can not do as the North does. “

Much of the economy of the Turkish Republic of Northern Cyprus is dependent on casinos. The ban on casinos in Turkey in 1997 prompted large groups to set up casinos in northern Cyprus, and the sector flourished.

casino earnings

The casino sector entered the public treasury of the Northern Cyprus authorities, $ 600 million in 2019, while the total budget in that year was $ 4.2 billion, according to “The Business Year”, the specialized financial media website that London based.

In the Turkish Republic of Northern Cyprus, casinos have the choice between paying taxes in proportion to their profits or obtaining a fixed rate license. The second option is preferred, as most casino operators are unable to disclose their earnings, leaving a “big dark space” in the sector, according to the Greek Cypriot expert.

“It is clear that the state is not the one to see if there is massive money laundering. Our state is completely dependent on business in casinos, our residents are hostages,” said Turkish Cypriot activist Esra Aygin, who had to join the TRNC leave for her safety ..

Sertaş Sunan, a specialist in economics and corruption at the TRNC, points to the model of the Turkish mega-group Merit.

He explains that “Merritt has his own TV channel and a newspaper. If you buy it, you get free coffee or a cool drink. His goal is not to make money from the two media offices, but to exert influence. . “

He continues, “It is very difficult for local politicians to say no to these giant Turkish groups, or to set rules and monitor them.”

The vast majority of casino owners in Northern Cyprus are Turks, but some of them were born in Cyprus, such as the head of the influential group “Arkin”, Erbil Arkin.

“I’m the pioneer of casinos” in the TRNC, “says Arkin. At the same time, the businessman founded a university dedicated to the arts near one of its casinos in Kyrenia.

Arkin says that in 1976, while studying art in London, he decided to enter the casino business. “There were great opportunities,” he says.

He recalls that Northern Cyprus, which unilaterally declared its independence in 1983 while remaining under the political and economic control of Ankara, “lived off the looting of houses” left by the Greek Cypriots. “Since (the casinos) settled there, the economy has changed. We were a pariah country, we became a tourist destination,” he adds.

He continues: “Casinos generate a lot of money and are a good source of employment, as 80,500 employees work in the sector, most of whom are Turks and Turkish Cypriots.”

The population of the “Turkish Republic of Northern Cyprus”, which does not hold a population census, is estimated by experts at 276,000, in addition to about 30,000 Turkish soldiers.

Casinos have brought invaluable wealth to Northern Cyprus as tourists come from Turkey, Arab countries and Israel, according to Arkin, who says, “We have become the Las Vegas of the Middle East.”

Responsible for happiness

In the casino of the Arken Group Hotel Colony in Kyrenia, customers of different ages can be seen playing with slot machines or at the playing card tables.

Suddenly, a young woman’s voice is heard shouting for joy over her winning 47,600 Turkish liras (3,040 euros) “Did you see? I won,” she says.

Immediately a young man hurries her happiness. Babacan (31 years old) is responsible for the “happiness” of customers. This young man was a former university professor of the French language, and he resigned his job to become a “hostess” at the casino and get a “better salary”.

Similarly, the young woman “S”. She is a 34-year-old Cypriot-Turkish “hostess” with an interview with Agence France-Presse in northern Nicosia. This young mother works at Merit casino because she “needs money”. “My role is to make the customer happy,” she says, on condition of anonymity. “If he loses, I encourage him to play again … and lose again.”

She tells how some of her co-workers supply drugs to clients, but also “female company”, but she refuses to do so “because God sees”.

A 2021 report by the US State Department showed that forced prostitution is common in northern Cyprus. The report said that “the 27 nightclubs in the Turkish Republic of Northern Cyprus are brothels where sex trafficking takes place,” pointing out that their managers are sometimes linked to members of the local government.

In Kyrenia, Erbil Arkin told AFP about money laundering, “I’m not saying that money laundering does not exist in Northern Cyprus, but do not look at the casinos (…) but look at the banks.”

criminal activities

In another report also published in 2021, the US State Department notes that “the foreign banking sector poses a money laundering risk” in the “Turkish Republic of Northern Cyprus”, adding that it “follows increasing illegal activities from Istanbul . “

The same report shows that “casinos and the gambling industry are poorly regulated and vulnerable to money laundering.”

This is denied by Erbil Erkin, who at the same time acknowledges that he does not verify the source of the funds used by his clients. “It’s the police’s duty. It’s the same in the south,” he says.

And he’s not wrong about that. The Greek Cypriot citizen against money laundering explains that the south of the island is also turning a blind eye to the source of the money used in its casinos, but the law in the south regulates institutions more.

“The fight against money laundering (…) is a challenge and an ongoing process. The authorities are working to take strong action and reduce risks,” the Cypriot finance minister said in a statement to Agence France-Presse. said. He adds that “the assessment of Cyprus (on this subject) drawn up by international organizations shows a solid legislative framework.”

“The TRNC is an ideal environment for any criminal activity,” said the director of the Euro-Mediterranean Institute of Geopolitics in Nicosia, Yorgos Stavri.

As it is excluded from the international economic and political system, in particular from the anti-money laundering monitoring bodies, it is “not accountable to anyone.”

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