Up to one million citizens in Georgia will not be able to gamble, as government introduces new restrictions

Gambling restrictions in Georgia

Up to a million citizens in Georgia will be deprived of the opportunity to participate in gambling as per the government is preparing a bill. This was stated by the Prime Minister of Georgia Irakli Garibashvili.

In particular, the ban will affect:

● Recipients of social benefits;
● Civil servants;
● Persons who appeal to the Tax Service with a request to apply a self-restraint mechanism to them;
● Persons caught in the so-called into a black list.

According to Garibashvili, all types of advertising for gambling on television, as well as outdoor advertising and advertising on Georgian websites will be banned.

In addition, gambling operators will only be allowed to sign sponsorship agreements, and this will mainly apply to sports.

Finance Minister Lasha Khutsishvili also spoke about the details of the bill. As he pointed out at a government meeting, instead of distributed profits, under the new rules, the so-called GGR (the difference between the rates received and the winnings issued) will be subject to taxation of 10% income tax. According to him, it is the generally accepted practice of taxing this gambling sector. In addition, winnings will be taxed at the rate of 2% withholding tax on withdrawals.

According to him, age restrictions do not apply to foreign citizens. For citizens of Georgia, a single age limit will be established – 25 years, and it will apply to both online games and gambling establishments.

Organizers of gambling will be obliged to only transfer the amount of winnings to the player’s personal account and only to a person registered as a player. It is also prohibited to transfer money from one player to another, which significantly limits the ability to play on someone else’s account. The rules for depositing and withdrawing money to the gaming account, as well as the rules for registering as a player will be regulated by a special law.

Gambling is one of the leading industries in Georgia. In 2016, the turnover of the gambling business in Georgia exceeded 4 billion lari (1.3 billion dollars), and worldwide, in 2015 alone, the profit from gambling reached 400 billion dollars.

According to businessmap.ge, gambling is the most profitable business in Georgia, and revenues in this sector even exceed those of commercial banks. For example, in 2016, the revenues of banks amounted to 2 billion lari, and that of the gambling business – more than 4 billion lari.

There are no statistics on the number of players in Georgia and the amounts lost by them. The government does not conduct any serious research on the social costs of gambling.

Despite the regulations, the number of casinos, slot machines and sweepstakes in Georgia, especially in Tbilisi, has increased in recent years. This is evidenced by a study of the Georgian gambling market conducted by Transparency International Georgia.

According to the study, a significant growth in the gambling business began in 2011, when the turnover of this sector exceeded the turnover of the previous year by 3.2 times, and the profit received was 54 times higher than a year earlier.