Cyprus has put off legislation to ban online gambling because of a three-month delay in feedback on its plans from its European Union partners, the finance ministry said Tuesday.

The east Mediterranean island's Communist-led government wants to ban online poker, slot machines and other casino games, which legislators say have an estimated turnover of 2.5 billion euros a year. It does not intend to ban online sports betting.

There are no casinos in Cyprus, but gamblers have exploited a loophole in the law which means that online gambling via providers based in other countries is virtually unregulated in Cyprus. Police and government officials have described the practice as a scourge which encourages vice.

A draft law calls for the creation of a licensing authority to issue permits and regulate permitted forms of gambling, and a legal source told Reuters This legislation would bring some order to the whole spectrum of betting.

The government sent its proposed legislation to the European Commission but has learnt that feedback from the EU executive and member states will not be ready until March 2011, rather than mid-December as it had hoped, the finance ministry said.

The government is opposed to casinos of any kind, but residents of the divided island can cross freely to the breakaway Turkish Cypriot state in north Cyprus and play at dozens of casinos there.

(Writing by Michele Kambas, editing by Tim Pearce)

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