Gambling in Georgia – Legislative Features and Development of the Industry in the Country

Gambling in Georgia – Legislative Features and Development of the Industry in the Country

Georgia is one of the countries having a very loyal attitude to the gambling business, as gambling is legal here, and gambling advertising is not restricted in any way. This niche has been developing legally for 25 years already. However, gambling has distinctive features in Georgia.

How to acquire a gambling license in Georgia

Gambling is hardly restricted in Georgia, as it officially belongs to the entertainment industry and encourages the development of the tourism industry. The local authorities support tourism and facilitate the development of the gambling industry that attracts visitors from other regions.

Gambling licenses are issued by the Revenue Service, where you have to file an electronic application. The permit to conduct a gambling business is also issued in the digital form.

Besides, you have to submit the following documents:

  • excerpt from the register of enterprises;
  • gambling fee payment receipt;
  • list of provided services (slot machines, games);
  • police clearance certificates of business owners;
  • prototypes of gambling chips.

The issuance of a license takes around 20 days and you do not have to pay for the license. If you want to get a permit urgently, it is possible to arrange that for an extra $800 fee. Citizens of other countries have to register on the website of the National Agency of Public Registry under the Ministry of Justice of Georgia to undergo the foreign qualification process.

The type of gambling activity defines the duration of a license. For betting houses and slot machines, the license is issued for the term of five years. Companies that provide lottery service get a permit for one year.

Gambling taxes in Georgia

In Georgia, compulsory gambling tax payments fall into several types. The sum of taxes depends on the location of a casino or a betting shop.

Gambling business owners pay:

  • annual tax levy;
  • quarterly tax;
  • current taxes.

Tbilisi, the most densely populated city in Georgia, pays the highest tax rate. Here the tax levy may reach $2 million per year. In other regions, the annual sum may start from $40 thousand. In remote areas (for example, Kobuleti and Kazbegi), facilities may be fully exempt from tax payments in case a hotel with 80+ rooms is built nearby.

Besides, facilities pay flat-sum tax per gambling equipment unit. Casinos pay 10% income tax. Besides, gambling business owners pay taxes for winnings and salaries (20%), real estate tax (1%), and profit tax (15%).

How does Georgian online gambling function?

According to the law, online casinos cannot operate without having a land-based analog with a valid Georgian license. To launch a gambling site, you still have to obtain a license in the Revenue Service and open a real casino, betting house, or lottery outlet. Websites that work without the land-based analog of the same name are considered illegal.

At the same time, you can use services of international online casinos that hold a license (given by any country). This does not contradict Georgian laws, and international operators are not blocked unlike the situation in Russia.

It is possible to provide online gambling services through mobile apps, the Internet, social terminals. Online casino activity is taxed separately. The amount of fees depends on the region, for example, the quarterly tax may reach $120 thousand in the capital of Georgia. Besides, the owner has to pay a mandatory tax on online casino operation.

Problems of gambling in Georgia

According to the data provided by the Association of Young Financiers and Businessmen, 400 thousand Georgian citizens use online casino services. The availability of gambling provokes the development of gambling addiction. To fight against this phenomenon, the authorities have raised the age limit, which allows playing at a casino, from 18 to 21 years old. Besides, there is a registry with compulsory registration of gambling participants.

Besides, the US State Department working on money laundering issues in different countries of the world states that Georgia is in the risk area, which is connected with the lack of strict regulation of the gambling sector in the country. Gradual changes in the legislation and a more thorough control from the side of the state agencies may help to solve this problem.

Scalability of the Georgian gambling market

The rapidly growing Georgian gambling market attracts the attention of big international companies. For example, early this year Paddy Power Betfair purchased more than half (51%) of stakes of the largest online gambling operator in Georgia – Adjarabet. The deal is estimated at $132.5 million. Headquartered in Dublin, the company made this purchase to widen and strengthen positions in the sports betting and online gambling market. Among other things, in the attractive market of Eastern Europe. Perhaps, Paddy Power Betfair will buy the remaining 49% of stakes from the Georgian operator.

Adjarabet is the leader among operators of the Georgian online gambling market accounting for 40% of the total revenue. Besides, Adjarabet started working in the regulated market of Armenia two years ago, where it gained 10% in 2018. Last year, the total income of the operator was equal to $80.6 million.

Changes in the gambling legislation

Gambling is hardly restricted from the legal standpoint in Georgia. For example, gambling advertising is not prohibited in the country, and the draft law that had to introduce changes to this area was halted. Despite the fact that official rules allow gambling from the age of 21, there is a legislative initiative intended to raise this age limit to 25 years old, but it is inactive for now.

Besides, the country is considering the draft law that could restrict gambling advertising. For example, gambling advertising could be banned nearby educational, medical, sports, and cultural institutions. There is also an offer to restrict advertising on television. Such changes could help to fight against gambling addiction and to comply with the principles of responsible gambling.

Alongside the consideration of restrictive draft laws, the government of Georgia is planning to support the gambling business in the remote areas of the country officially. For example, to reduce the tax levy paid for the construction of gambling facilities and hotels in certain locations. Some of these regions will be Poti, Ureki, and Grigoleti.

Conclusions

Gambling is the most profitable industry in the country. In 2017 only, the total tax collections from organizers of gambling activities reached 332 million GEL, and the total turnover of the gambling market was worth 5.65 billion GEL. The industry is growing because it has support from the government – the authorities of Georgia focus on tourism, and especially, gambling tourism.

You can learn more about the prospects of gambling in the country at Georgia iGaming Affiliate Conference. The event dedicated to affiliate marketing and gambling industry will take place in Tbilisi on October 17.

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