In his recent 2024 budget speech, Prime Minister of Georgia Irakli Gharibashvili said that gambling levels have become “catastrophic.” He backed this claim with startling statistics. In just the past year, the total turnover in the Georgian gambling industry has grown from 48 billion to 52 billion Lari. This rapid 14% speed-up has jolted legislators into action. The Georgian government has unveiled a tough reform package. It will take effect from July 1st, 2024.
According to the experts’ review from TestCasinos.com, the extensive upcoming regulatory changes constitute the most radical policy shake-up since the reforms of 2021. Those previous amendments raised the legal gambling age to 25 years, ban on advertising, and increased taxation from 10% to 15% on iGaming companies in an effort to promote a responsible attitude. But the latest participation figures show this. Earlier reforms have clearly failed. They did not restrain the Georgian gambling sector.
Stringent Gambling Surveillance Across All Channels
Under the strict new package of gambling reforms, offering any form of gaming in unlicensed digital or physical venues is banned. This includes places like internet cafes, bars, and shops. The punishment is harsh: $30,000 fines per breach, a five-fold increase from before. The big penalty shows how serious the government is. They are intent on ending unauthorized gaming.
Licensed operators also face amplified compliance obligations from 2024. Both betting shops and internet platforms must add stronger, responsible protections. They must include identifying and suspending problem gamblers. Any firm that fails these responsible oversight duties risks fines reaching 300,000 Lari.
“This reform package enshrines our firm commitment to regulating gambling,” stated Finance Minister Dimitri Kumsishvili. “We will enact tighter nationwide restrictions around the provision and ruthlessly penalize unlicensed operators.”
Tax Rises Seek to Curb Rampant Gambling Demand
The country also hopes to reduce gambling participation. It will do this by raising taxes across the industry.
The current 10% tax on this revenue paid by casinos, bingo halls, and bookmakers will rise substantially to 15% from July 2024. Georgia also triples the existing 2% customer cash withdrawal tax imposed on online platforms to 6%. Government economic planning agencies project these new tax brackets to contribute an additional 400 million Lari annually.
Prime Minister Gharibashvili announced tax hikes. He said they aim to raise its cost and reduce reckless gambling by Georgians. Too many citizens across all ages and backgrounds are getting drawn into this, even given current measures, Gharibashvili stated. We must curb this trend through whatever appropriate means possible.
Sky-High Fees Control Georgia’s Online Casino Sector
The previous 2021 reform package banned 10 major land-based casinos from running legal online casinos. But, the upcoming regulatory overhaul partly reverses this. From July 2024, venues including Tbilisi’s Crystalbet, Batumi’s Casino Adjara and Poti’s Casino Iveria will gain licenses permitting parallel internet and retail casino offerings.
The Online Gambling Industry Market in Georgia
| Year | Online Casinos (in million EUR) | Online Lottery (in million EUR) | Online Sports Betting (in million EUR) | Total (in million EUR) |
| 2017 | 3.99 | 4.19 | 5.21 | 13.40 |
| 2018 | 4.07 | 4.36 | 5.41 | 13.83 |
| 2019 | 4.78 | 5.07 | 6.39 | 16.24 |
| 2020 | 5.47 | 5.55 | 7.19 | 18.21 |
| 2021 | 6.33 | 6.00 | 8.03 | 20.36 |
| 2022 | 8.50 | 7.53 | 10.39 | 26.42 |
| 2023 | 9.59 | 8.06 | 11.39 | 29.04 |
| 2024* | 10.71 | 8.73 | 12.54 | 31.98 |
| 2025* | 11.58 | 9.32 | 13.51 | 34.41 |
| 2026* | 12.19 | 9.81 | 14.28 | 36.28 |
| 2027* | 12.66 | 10.24 | 14.94 | 37.84 |
| 2028* | 13.14 | 10.68 | 15.60 | 39.42 |
*It is expected to show an annual growth rate of 5.37% from 2024 to 2028
However, for other companies wishing to enter the Georgian online casino sector, market access comes at an extortionately high cost. From 2024, the blanket annual casino licensing fee per internet casino portal stands at a staggering 1.6 million Euros. Small-to-medium operators simply cannot afford six-figure permitting fees, meaning only the largest industry players gain access.
In my opinion, it’s a huge amount of money for this region and not to mention for any country within the EU, as commented industry analyst Alex Szilaghi. What we’re seeing here is deliberate market manipulation through astronomic license pricing to funnel business to key domestic operators.
Final Thoughts
Georgia has an upcoming reform agenda. It will include stricter regulations, responsible protections, punishing taxes, and tight licensing. The goal is to stop its growing crisis.
However, the country still needs to give urgent attention to educating about and supporting those with problems. This is to tackle addiction issues among vulnerable citizens, say non-profits. The rules and enforcement aim to limit it. But, effective treatment and guidance are also vital. They are vital to overcome entrenched harm challenges.
Author: Irakli Chikovani
