CIS and Baltic states market focus: Georgia

Online encyclopedia Wikipedia describes Georgia at the “crossroads of Western Asia and Eastern Europe”, a nomenclature which rings true when it comes to gambling regulation. With its forward thinking regulatory system and operator-friendly attitude towards the gambling industry, online casino suppliers such as Evolution Gaming and sports betting firms like Flutter have been dipping their toes into the Black Sea coastal state.

However, the strong emphasis on locality in Georgian gambling has made some operators think twice about entering what is an important, springboard market for an entire region of regulated gambling players.

In the third of this five-part series, EGR Compliance, in association with international law firm Dentons solicitors, analyses the shape of Georgian regulation and looks at how the westernisation of this birthplace of Joseph Stalin might lead to a new western Asia hub for gambling.

Population: 3.9 million

GDP per capita: $4,790

Internet penetration: 66.6%

President: Salome Zurabishvili

Principal regulatory body: Revenue Service of the Ministry of Finance of Georgia

There are nine types of permits:

1) lottery;

2) casino;

3) gambling club (place for organising table games (e.g. poker));

4) slot machine halls;

5) sports betting;

6) lotto;

7) bingo;

8) incentive lottery;

9) online gambling.

Only lottery, casino, sports betting and slot machines are available online.

Permit for online gambling could be obtained only after obtaining of respective land-based licence.

It should be noted that a permit for a gambling club can be obtained only by operators that have a permit for casino and/or slot machines.

Term

All permits are issued for five years (except for the permit for incentive lotteries which is issued for one year).

Licence fee

Fee rates for gambling businesses vary depending on types of gambling business (such fees are payable each year):

slot machine halls from €14,000 to €290,000
lotto and bingo: €4,000 for each
sports betting from €9,000 to €87,000
gambling club from €3,000 to €14,000
casinoacross the entire territory of Georgia (except for the city of Batumi, the adjacent territory of Bazaleti Lake in Dusheti Municipality, Gudauri recreational territory, the territory of settlement of Bakuriani, as well as the territories of Kobuleti, Borjomi, Tskaltubo and Signagi Municipalities): not more than €1.4m.

A permit fee need not be paid for setting up a casino in Gudauri recreational territory, in the territory of settlement of Bakuriani, as well as in the territories of Tskaltubo and Signagi Municipalities. During 10 years after the issuance of a permit for setting up a casino in the territory of a newly built hotel, a permit fee need not be paid for setting up a casino in the territory of a newly built hotel with at least 100 rooms in the city of Batumi and in the Municipalities of Kobuleti and Khelvachauri, as well as in the territory of a newly built hotel with at least 80 rooms in the villages of Anaklia and Ganmukhuri in Zugdidi Municipality.

For now, there are no such restrictions.

However, there are continuous talks about imposing additional restrictions on the advertising market (akin to other CIS countries).

Georgian legislation is considered as one of the best within this region, which allows operators to easily establish their business. To add to that, the Georgian government is generally friendly towards the gambling industry.

The main issue that should be kept in mind while expanding into Georgia is that the positions of Georgian language are very strong, and it is preferable to have everything translated into Georgian for the local players.

The market and the legislation are great, but existing local focus jeopardises its perspectives in terms of becoming the main market in the region.

However, it is believed that this situation is going to change soon as the process of Europeanisation of Georgia is still active and inevitably will lead to the deepened integration of Georgia into the European gambling contexts.

Ilya Machavariani is a gambling and gaming lawyer for Europe, Russia and the CIS heading the Russian and CIS gambling practice group at Dentons. He has extensive experience advising on gambling issues and advises clients on operating in the Russian Federation and the CIS, on the full range of regulations relating to the activities of gambling operators, as well as drafting the necessary contracts and internal documents. He also handles licensing processes for gambling operators that are entering new markets throughout the world.

Ivan Kurochkin being an associate at CIS gambling practice group at Dentons has broad experience on gambling issues, especially in regulatory matters. His work involves advising clients doing business in the Russian Federation on various activities of gambling operators (including bookmakers), focusing on issues related to compliance with gaming licence requirements, applicable AML requirements, and issues relating to advertising of gambling operators.