Ahead of October’s SBC Summit Tbilisi, the Georgian Gambling Association’s Head Of Administration George Mamulaishvili examines the state of play in Georgia’s gaming industry.
The gaming industry in Georgia has experienced significant fluctuations in recent times, primarily due to the introduction of additional regulations. While regulation plays a crucial role in shaping the gaming business, it is essential to adopt the right approach to avoid creating new problems.
Despite these challenges, Georgia’s market is rapidly developing and growing, with changes in player behaviour and the formation of a gaming culture.
This has created the potential for the Georgian market to expand internationally, driven by flexible tax legislation that has attracted numerous foreign companies, particularly game providers. Additionally, established operators such as Entain, Flutter and Betsson Group are already active in the Georgian market.
However, the presence of illegal operators remains a significant challenge that requires comprehensive approaches from both operators and the State. It is essential to promote local operators and implement effective preventative measures to discourage players from turning to these illegal operators.
While legislative changes are being made worldwide to combat illegal activities, the promotion of legal operators is proven to be the most effective method. Incorporating the expertise of business professionals in discussions and decision-making processes is crucial to creating a favourable legal framework that supports the industry.
Changes to the legal framework
Starting from June 2024, significant changes will be implemented in the legal framework governing the gaming industry in Georgia. These changes include the introduction of three types of licences for online casinos: online casino, online slot machines, and online betting. Previously, only two licence types were available for online casinos and online betting. Additionally, online operators will be subject to a quarterly fee of 250,000 GEL (GBP 75,000), in addition to the licence fee.
Furthermore, the conditions for obtaining a licence have been revised. Previously, online activity licences were tied to physical facilities, such as a casino or bookmaker’s office.
Under the new regulations, companies will have the option to open any of the three types of physical facilities: a casino, a slot machine salon, or a totalizer. Each type of physical facility will incur a licence cost of 100,000 GEL. Alternatively, online operators can choose not to have a physical facility but will be required to pay higher licence fees: 1 million GEL for online slot machines, 1 million GEL for online totalizer, and 5 million GEL for online casino.
While the introduction of licensing was necessary, the approach may require reconsideration. Online operators are primarily focused on the online space and might find the price charged for online casino licences unreasonable. Additionally, the division of licences into three parts might be viewed as irrational, considering the changing landscape of the gambling industry.
A land of potential
The gambling industry in Georgia is experiencing significant growth, positioning the country as a potential hub for post-Soviet and Asian countries. This trend has attracted numerous new operators and game suppliers to relocate their operations to Georgia.
The logical reasons behind this shift can be attributed to several factors. Firstly, Georgia’s tax laws offer remarkable flexibility, particularly benefiting technology and IT companies. Additionally, the country provides easy access to neighbouring markets and stands out for its corruption-free business environment, distinguishing it from some of its neighbours. The ease of managing and initiating a business in Georgia further adds to its appeal.
With the right legislative approach, companies have the opportunity to enter international markets and offer their services to foreign customers. The requirement of gaming licensing has significantly enhanced the credibility of gambling providers based in Georgia.
The strict monitoring and regulation imposed by our legislation contribute to their positive image, leading foreign operators to seek collaboration with Georgian companies. Consequently, Georgia’s market proves to be both promising and conducive to growth within the industry.
Associations and collaboration
Associations, such as the GGA, play a vital role in the gaming industry as they act in the best interests of operators, engaging in consultations with the state and seeking relevant information to enhance industry practices.
Active involvement in the development of legislative projects is crucial. For example, associations significantly contributed to the formulation of the user verification of identity law, which had a positive impact on the industry from an AML perspective.
Through acting as mediators between the state and business operators, associations facilitate effective cooperation and actively engage with regulators. They also promote responsible gaming campaigns and play a crucial role in disseminating accurate information and statistics to combat the stigma associated with the industry. Furthermore, associations assist new market entrants by providing guidance and support.
The gaming industry in Georgia faces both challenges and opportunities but, with the collaborative efforts of all stakeholders, it can continue to grow and thrive.
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