Georgian Prime Minister Raises Tax Rate For Gambling Businesses In Georgia To 15%

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Georgian Prime Minister Irakli Gharibashvili has raised taxes on the gambling industry and reported that the level of gambling in the country is “catastrophic.”

Rise of the gambling turnover:

During his budget speech, he commented that gambling business turnover had increased from GEL 48 billion to GEL 52 billion, aka $19.2bn/£15.5bn/€17.9bn. However, this specific data is for last year, which Gharibashvili commented was a “catastrophic figure,” according to Rustavi 2.

He also pointed out his surprise at this risen rate of the participation, which occurred regardless of the ban on advertising. Raising the minimum age to 25 meant that 1.5 million young individuals were limited from gambling.

As its response, the Government will raise the tax rate on the revenue of the gambling industry from 10% to 15%. But that’s not all; because there will also be changes in terms of cash withdrawals, where gamblers will now have to pay a fee of 5% instead of the previous 2%. In this regard, Gharibashvili commented:

“These amendments to rates will raise an additional GEL 400m per annum.” In addition, he added: “I want to express surprise, on the one hand, on the other hand, it is very sad that the turnover of the gaming business is increasing. I am really not happy, too many citizens are still involved in the gaming business. You know that we made important changes last year when we banned advertising and also restricted our citizens from participating in the gaming business to the age of 25. Automatically 1.5 million citizens have been restricted from participating in the gambling business. Despite this, we see that quite a few citizens are involved in it. Accordingly, we have made a decision to increase additional taxes on this business, and as we told you, GEL 400m will be collected in addition.“

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Georgia gambling laws reform package:

During the previous months of 2023, the aforementioned Prime Minister signed a collection of reforms aimed at Georgia’s gambling laws, involving the latest regulations restricting online casinos to land-based companies. Also, according to his words, the main goal of the aforementioned reforms was a relentless fight against various harms caused by gambling, which have been occurring more and more frequently in recent years, especially among young people.

The reforms represent the biggest change to Georgia’s gambling laws since the last one happened 3 years ago, aka in 2021, when the country sought to “reform its regulatory regime” amid fears of safer gambling in the midst of the rise of the aforementioned country as a land-based gambling center. Especially for the occasion, the Parliament of Georgia officially voted to increase the age limit considered normal for gambling to 25 years, increase the tax for iGaming firms by 70%, prohibit TV advertising and the self-excluded and bar public workers from gambling.

The difficult process of obtaining a gambling license:

According to the new set of rules, 10 land-based casino operations in Georgia, involving the top 3 companies Crystalbet, Casino Adjara and Casino Iveria would officially be allowed to possess an online casino license. Likewise, online slots offering would be restricted to retail slots salons and sports wagering to brick-and-mortar sportsbooks.

Even though extra online licenses are now accessible, the government requires a fee of €1.6 million per license owner annually. Commenting on the fee, president of Szilaghi Consulting, Alex Szilaghi, said : “This was a large fee considering the size of the region. In my opinion, it’s a huge amount of money for Georgia – not to mention for any country within the EU. What they were trying to do is allow local companies to grow and to create an equal playing field for everybody.”

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Correction: An earlier version of this article named “Adjara Group” among casino operators in Georgia. And while Adjara Group is based in Georgia, the hospitality and lifestyle development holding company operates in various sectors such as hotels, restaurants, cafes, etc. but has no involvement in gambling operations. It was corrected on Nov. 8, 2023, to identify, Casino Adjara, a land-based casino operating in T’bilisi, Georgia since 1998, as the intended gambling business.

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