The Cyprus banking crisis has felt pretty far away for most of the world, but it may come crashing down on the online gambling industry.
CalvinAyre.com is reporting that several large, US-facing financial processing services and affiliate programs have accounts in the small country’s troubled financial institutions.
Though the article didn’t name names, it implied that some big name companies would be impacted by what’s being referred to as the, “haircut,” and that losses would would ripple across the industry by way of late payments.
Under the terms of a bailout deal worked out with European Commission, International Monetary Fund and European Central Bank, bank accounts with more than €100,000 may be in line for a massive 40% tax to help bail out the country’s banking system.
The Cypriot banking industry’s reputation for being low on regulations and high on discretion has made it a favorite for gaming companies that do business with American players, as well as Russian oligarchs. In a bit of cruel irony, these are the very factors economists are blaming for the country’s current financial crisis.
Though the situation in Cyprus is pretty ugly, it’s not likely to be repeated elsewhere. Cyprus’ banking system is not dialed into worldwide markets and, despite the €5.8 billion bailout, its assets are relatively small.
Any impact of the Cyprus banking crisis on affiliates isn’t likely to be felt right away as banks on the island have been close for almost a week.
Are you worried about the impact of the Cyprus banking crisis on your revenue streams? Share your thoughts in the comments section below.