24 Jan, 2024
The gambling market of Georgia is often called a model. As a space for doing business, foreign investors consider it one of the first. But often, even in the Georgian mass media, the information about the fact that almost every fifth person is addicted to gambling is "missed".
Which of these is true? And thanks to what methods did the Georgian market manage to "bloom" in just three years? The Gambler asked the head of the Gambling Association of Georgia George Mamulaishvili about everything.
I read your latest news. They write that from July the rules on the Georgian market will become stricter. Age restrictions already exist, what will change?
Yes, there were fines before. They will simply increase from summer. The user verification and identification system was introduced in 2019 and all online operators are required to identify the user. Since 2022, the age limit for the local population has been introduced. That is, a citizen of Georgia does not have the right to play under the age of 25. And if the relevant authorities prove that a person under the age of 25 played in the casino, the casino will pay a fine. Foreigners can play from the age of 18. If a foreigner comes and plays in a casino at the age of 19 - no problems.
And what illegal schemes do you have? Are mirror sites used in the market?
There is no way you can play with the legals. And there are no mirror sites either. It's all monitored, the monitoring system is very good and illegals don't use mirrors - that's the first thing. Second: almost all operators are foreign companies that value their image and their policies much more than, for example, making a mirror site and earning a few pennies from it. Because some of these companies are represented on international exchanges. And if that information gets out, their stock will plummet.
How then do those who cannot play get around the ban on the game?
These prohibitions are circumvented in such a way that illegal operators use cryptocurrency, transfer money to electronic wallets, sites like 1xbet. Such illegal sites try to enter the Georgian market and try to take away such users who want to play. There are also handing over accounts and other things...
And what is the punishment for organizing an Internet cafe? Do you have such facilities?
If you have an Internet cafe and open access to online gambling, it will be subject to a larger fine. Internet cafes do not have the right to open access to online casinos, pornographic content, etc. This cannot be done even now, roughly speaking, this is just news about the increase in fines.
All these changes were provoked by the problem of gambling in Georgia, which is written about everywhere?
We don't have these problems. The register clearly showed how many people we have registered in this database. A person can come to the tax office, write an application and get into this register. The second system is that the relatives go to court, will provide information that the person has an addiction and will be banned from playing for 5 years. It is interesting that there are only 32 such people.
Why then do they write that, according to research, every fifth person in Georgia is addicted? Who counted it?
What research? There are no studies. Populism, lies. These are all our opponents. The category that plays gambling games and uses illegal sites, there is no control. They log in via VPN, use electronic payments, cryptocurrency and play on illegal sites. There is no such thing as a gambling addict playing with a legal operator, because there are various systems that analyze and control the behavior of any player. If he starts making unspecified bets - he will be blocked. The fact that populists say that ludomania is developed is not proven information, they label people.
Why did the government raise taxes then? In some articles, the Georgian mass media put addiction in the first place among the causes.
Taxes began to increase to replenish the budget. Everything. Only for this, not to reduce the number of players. Because the number of players did not decrease after this ban... On the contrary, a lot of loopholes appeared, how you can connect to gambling games...
It turns out: fewer prohibitions - more law-abiding?
World practice shows us very well that if the market is completely white and legal, there are no strict rules and prohibitions, then illegal operators and those operators registered in offshore zones do not enter this market. It was like that until the 22nd year in Georgia. Illegals did not enter Georgia, and after the age ban was introduced, a lot of illegal operators appeared. Because they became interested in luring the category that was banned from playing. I see a lot on social networks, sites that I have not even heard of are advertised there. Europe itself has already come to the conclusion that it is better to have a legal controlled operator than illegal operators who harm not only business, but also the state and society.
How attractive is Georgia for a foreign investor now?
The market of Georgia has always been very attractive for foreign investors because it is very well developed. In addition, we have very large benefits for the technology company, and Georgia also has a very good access to Near Asia and the post-Soviet countries. Several large companies actually opened their offices here, bought companies and work in Georgia, and are trying to expand to foreign countries. For example, Flutter, it has a Georgian license, it also works for Armenia, has a very large profit.
How attractive do you think tax legislation is in Georgia's gaming sector?
In the 22nd, 10 percent of the GGR was introduced, this time - 15. And for slot clubs, a tax of 15 percent of the GGR was introduced. 5 percent is deducted from the profit. What the client takes out will pay 5 percent of it.
And with us, the player has to give 19.5% of his winnings to the treasury...
If we compare with other, for example, Great Britain, European countries - they have more taxes than ours. I can honestly say, I have said more than once: Ukraine has a lot of problems in the area of gambling. The rights of investors have not yet been taken into account, the investor is not protected. There is a problem in the legislation, the changes that were supposed to be adopted before the war, they have not been adopted yet. I understand that military actions are in an active phase and the government is not into gambling. But Ukraine had a great chance to become a hub in the post-Soviet countries. And if the government wants to develop the gambling business in its country, it should look at the gambling business differently. This industry is a direct development of the economy, a direct development of tourism.
Here's how it was: in 2005, the first law was adopted. After that, Batumi, Kazbegi , Sighnaghi, Bakuriani developed well, where offline casinos were opened and there was an influx of tourists. Eight regions of Georgia are replenished, more than 50% of the budget comes from the gambling business, from the taxes they pay to the local budget.
What is the task of the Association to have such a result as in Georgia? How did you do it?
The idea of creating the association was that the association would be a moderator between business and government, we have a very good contact. We constantly work with the tax office and the regulator, we have regular meetings. There is, of course, government policy that we simply cannot change. Raising taxes is a political decision to increase budget replenishment...
But many of the laws that were passed, the same verification/identification system - we took a direct part in this. The same applies, for example, to legalization and the law on money laundering. Now we are thinking how to reduce the access of illegal sites to our market, what can be invented. The association takes a direct part in legislative processes. Even when laws are passed on some small, technical details. For example, sending information to the rate regulator. There are technical issues, the association is trying to refine everything so that it is easier for the operator, and the regulator gets what it wants. If the company abandons all current processes and simply does what the regulator requires, it is wrong. This is what drags the business down.
In what year did it become clear that the market would live?
Since 2008, it was already clear that the gambling business greatly helped the development of tourism, it was a locomotive. Since 2009, consider it a mini Las Vegas. If you compare the old Batumi and the new Batumi, these are two big differences. It is like air and earth. Gambling business is not only about an open casino, it is also about the developed infrastructure around.