Cyprus Mail
Cyprus

Casino deal highlights win-win between government and business

In the business world, there is not a lot that happens in terms of altruism. When an entity helps another, it is typically a quid pro quo type of situation. For example, when the government helps a large business, both parties are getting something out of the arrangement. The government gives the business a significant tax break in exchange for the boost in the economy that the business will provide. This happens on all governmental levels, from national all the way down to the governments of small towns that are trying to boost the local economy.

However, this type of arrangement typically does not happen without a great deal of thought put into it on both sides. Trust needs to be established not unlike the trust between mortgage borrowers and private money lenders, just at a much grander scale over a much longer span of time. Oftentimes, these relationships require the help of a third party such as a loan servicing company.

One example is the new casino in Cyprus that is in planning at this time. It is expected to begin its operation in 2021 and bring approximately 838 million dollars into the economy of Cyprus starting in 2022. This large amount of money is a very significant four percent of the economy of the island. It is predicted that this new casino in Cyprus will be bringing all sorts of jobs to Cyprus, including 2,500 jobs for permanent staff and 4,000 construction jobs.

Additionally, it is expected to promote tourism significantly, with an expected 300,000 people coming to visit Cyprus from all over the continent and the rest of the world. This casino will likely get a hefty tax break from the government because of what it is contributing to the economy of the nation and how it is helping the government of Cyprus in that way. The building and opening of this casino is seen as an event that will be mutually beneficial to both the owners of the business and the government of Cyprus, as is the case in most of the situations where the government provides these types of new businesses with financial help as they are starting up.

Another way in which the government can help these businesses is through loan servicing. Essentially, this is simply the government or a government-sponsored entity functioning as a lender for the business while the business is getting its feet off the ground financially. Loan servicing can give the business a significant boost, which in turn is expected to boost the economy and benefit the government. Of course, since it is a loan, the company will have to pay it back with interest in a timely manner. This is not expected to be a problem in the cases where the business is expected to thrive, make a great deal of money, and boost the economy significantly.

The government would be very unlikely to provide a loan or a tax break to a company that it does not feel will benefit the nation and the economy in a significant way, however. This is why the business would need to prove to the potential lender that it has the capability to provide jobs and bring in tourists to boost the economy. Not every business will be able to do this, so they will have to start up without help from the government. This is not to say that they will not be able to be financially successful, but they will not have the help from the government that the casino that will be starting up in Cyprus will have.

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