07 Dec, 2021
The government of Georgia plans to strictly regulate gambling, limit online casinos and increase taxes. According to the Prime Minister, online casinos should be banned in the second stage.
According to George Mamulaishvili, head of the Georgian Gambling Association (GGA), banning legal casinos from switching players to illegal sites and the so-called It will lead to a return to the practice of handcrafting.
"If we restrict legal operators in Georgia, the player will still find a way to switch to other, including illegal, sites. The principles of so-called sleight of hand will return, which was before, and the country has gone a long way to eliminate this.
Part of the population is involved in illegal gambling. This amounts to 120 million GEL per year, and according to our calculations, it will increase at least ten times, but here too a complex approach is needed.
A person aged 18 to 25 who has become accustomed to illegal sites and their bonuses will not return to the Georgian market. Today, there are many ways to make both Internet access and money transfer. I'm not even talking about plastic cards, I mean electronic wallets, cryptocurrency. Many illegal crypto casinos have already started advertising their products in the Georgian space", says the head of the association, George Mamulaishvili.
According to the Minister of Finance, Lasha Khutsishvili, the government's plan is aimed at limiting the attractiveness and availability of gambling, which will lead to a decrease in the demand for casinos and casinos and, therefore, the income of companies.
In addition to direct restrictions, the Ministry of Finance plans to change the taxation system and significantly increase the tax pressure on casinos.
In recent years, the gambling industry in Georgia has been growing at a high rate, in particular, according to the information of the National Statistics Service, in 2017, the total turnover amounted to 6 billion GEL, and in 2020 - 32.1 billion GEL.
The growth of almost 430% in 3 years is an unusually high rate, which is mainly due to the increased demand for online casinos.
The government's plan aims to limit this new and growing segment of gambling.
It should be noted that gambling business is one of the most strictly regulated areas under Georgian legislation, gambling companies pay a number of taxes, namely profit, income, VAT, property and gambling business tax.
In total, approximately 300-400 million GEL is included in the state budget from gambling companies with taxes and fines.
In addition, the gambling sector in Georgia employs about 11,000 citizens, and the average salary of those hired reaches 2,000 GEL.
Despite the fact that business turnover has increased by almost 430% since 2017, the amount of money received from taxes has not changed significantly, which is caused by a number of factors.
One of the main reasons for the disproportionate relationship between the growth of company revenues and the volume of taxes is the legal framework. Much of the regulation is tailored to brick-and-mortar establishments, casinos and slot clubs, not online casinos and digital services.
According to the Minister of Finance, stricter regulations have a negative impact on the income of gambling companies, and the restriction of the right to play for the population aged 18 to 24 is especially important, as the number of citizens of this age in Georgia reaches 280,000.
Nevertheless, Lasha Khutsishvili thinks that the state budget will not incur losses, because the reduced revenues of the companies will be balanced by the increased taxes.
So far, it is not known exactly how the field of gambling will be regulated, however, it is likely that in the event of a ban, a large number of users will turn to international online casinos, and the money received by Georgian companies and the country's budget will be transferred to other countries through the VPN, thereby increasing the dependence on gambling. The problem will not be solved, and the economy of Georgia will suffer.