Internet gambling firm Betfair warned it was considering legal action against Cyprus after the country banned online casinos and exchange betting.
Betfair made about 4% of its revenues - equivalent to £9m - from Cyprus in the last year.
The Cypriot parliament pushed the measure through on Friday after long delays and heated battles over its content.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The state is worried it is losing billions in tax revenues to online casinos as well as exchange betting, where punters bet directly with each other using a company as an intermediary.
However, Betfair said the legislation contained "serious flaws and, in certain areas, is inconsistent with European Union law".
"Betfair is working with advisors to understand the potential implications on its business and will be taking all necessary steps to reduce the impact on profitability through both legal action and cost management," the firm said.
OPAP - a company which runs the lottery in the country - was exempted from the legislation, which also contains new taxes on betting shops.
Several arson attacks on OPAP outlets have been blamed on local firms begrudging what is seen as preferential treatment for the company.
There was no suspicion of any involvement from Betfair in such actions.
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
