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Georgia raises gambling tax rates to halt “catastrophic” participation increase

| By Richard Mulligan
Georgia’s prime minister has increased taxes on the gambling sector as he described gambling levels as “catastrophic”.

In his budget speech, Irakli Gharibashvili said that sector turnover grew from GEL48bn to GEL52bn ($19.2bn/£15.5bn/€17.9bn). This 2022 level was described as a “catastrophic figure” by the Eastern European nation’s prime minister.

Gharibashvili noted his surprise at this increased participation rate, which came despite the imposition of a ban on advertising. In addition, the lifting of the minimum age to 25 has meant 1.5 million young people have been restricted from gambling.

In response, the government will increase the rate imposed on gambling business profits from 10% to 15%. There will also be a change regarding the withdrawal of money with players now paying 5% instead of 2%.

These amendments to rates will raise an additional GEL400m per annum, Gharibashvili said.

Gharibashvili said: “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, GEL400m will be collected in addition.”

Georgia’s gambling reforms

Earlier this year, Gharibashvili signed off on a package of reforms to the country’s gambling laws, including new rules that limited online casinos to land-based organisations.

Gharibashvili said the reforms were aimed at combating gambling harms, which have become an issue in recent years, particularly among younger demographics.

The reforms are the largest shake-up to the country’s gambling laws since 2021, when Georgia attempted to reform its regulatory regime due to safer gambling fears amid the country’s rise as a land-based gambling hub.

On that occasion, the Georgian parliament voted to raise the gambling age to 25, raise taxes on online gambling businesses by 70% and ban TV advertising, as well as bar public employees and the self-excluded from participating in gambling.

Ring-fenced casino licensing

Under the new rules the country’s 10 land-based casino businesses – including the three largest entities Casino Adjara, Crystalbet and Iveria – would be permitted to hold an online casino licence.

Similarly, the offering of online slots would be limited to retail slots parlours – as well as sports betting to physical bookmakers.

While additional online-only licences are now available, the government is requesting a fee of €1.6m per licence holder per year.

Alex Szilaghi, president of Szilaghi Consulting, says that 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,” he says. “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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