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Prospects for the development of online casinos in Georgia.Opinions of participants at Casino Forum Batumi

August 31, 2016
7 min
9321

On August 18, 2016, the capital of Adjara hosted a conference dedicated to the promotion of Georgian gambling industry – Casino Forum Batumi.

Batumi is a key tourist and gambling center. It has been rapidly developing in the last decade, and the investment flow in ‘Las Vegas at the Black Sea’ is growing year by year.

During the event participants shared their experience of working in Adjara, learned more about the legislation of the country, as well as about new gambling trends and player acquisition strategies.

Adjara is attractive for gambling business due to its loose policies, simplified document flow, flexible taxation system and absence of corruption. Casinos play a key role in the Georgian economy in terms of finance, tourism, and other spheres of activities. National authorities encourage foreign investors and create conditions for their comfortable operation. Players from Turkey, Russia and other neighbouring countries annually spend around $1.7 billion on gambling there.

Casino Forum Batumi featured a traditional demo zone, where leading sales managers from Stotegrator Company, NickolayTugolukov and VadimPotapenko, alongside other participants, presented both well-reputed and absolutely new solutions for online casino business. Among them were internet casino platforms, game content, ready-made WhiteLabelsolutions and many other things.

Nickolay, Vadim, please share your impressions of the forum.

Vadim: The forum was outstanding. Successfully chosen event venue, interesting program and reports of speakers made it extremely useful for all participants and visitors.

Nickolay: Our Company has been working with several Georgian projects for a long time. At the forum we met with our existing partners and discussed the prospects for cooperation with new partners. There were also many representatives of various gambling sectors, so the event undoubtedly was very fruitful for each participant.

Why currently Georgia is the most attractive region for investments and gambling business development?

Vadim: Georgia is one of the few countries with very loyal conditions provided by licensing bodies. Operator gets a single license for both land-based and online casinos. Based on feedback from our Georgian customers, it is one of the best regions for conducting business. The license costs $101 thousand, and is issued by the regulator – the Revenue Service of the Ministry of Finance of Georgia. The same institution administers gambling business and forms the taxation system.

Nickolay:Primarily due to the low level of corruption and absence of red tape obstacles when registering enterprises and obtaining licenses.

Application for obtaining a permit is filed in electronic form. The answer comes within 20 days. This time frame can be reduced by paying an additional fee: $160 for a 10 day period; $320 for a 5 day period; $800 for getting a reply on the next day after submitting the application. Entrepreneur can obtain a permit for the period of 5 years. Hardly anywhere you will find such loyal conditions for starting gambling activities.

It’s also worth mentioning that the region has afavourable geographical position, developed transport infrastructure and simplified visa requirements, and more frequently – visa free regime, thanks to what many players come to Georgia from neighboring countries, such as Turkey, Russia, Azerbaijan, Iran, where gambling is prohibited.

What are the peculiarities of fiscal regulation of gambling business in Georgia?

Vadim: Gambling tax is relatively low. And in case of online betting, taxes are minimal and comprise just 5%. According to the feedback from those who work in the Georgian market and those with whom I communicate, I have not heard about any pressure or infringement of their business from the side of authorities. The whole system is very loyal and promotes the development of gambling and concurrent industries such as construction, tourism, etc.

Nickolay:Georgia has a very comprehensible and transparent tax paying scheme. The law stipulates annual and quarterly payments for gambling business, the amount of which depends on the type of activity and location. Current payment rate for gambling institutions comprises 12-20%, for online betting – 5%. One of the speakers at the forum was the Senior Officer of the Revenue Service of the Ministry of Finance of Georgia, Teona Shiukashvili. She told about the main current regulatory trends for land-based and online casinos. Today, only the owners of land-based gambling houses can launch online projects in Georgia. Tax for holding a website comprises $13-26 thousand, and is paid every three months. There are no plans to change these norms in the nearest future.

What legislative initiatives and changes in Georgia did speakers mention?

Nickolay:Currently, tax assignments to state budget comprise around $80 million a year and the state is interested in their further growth. Therefore, all initiatives are primarily aimed at achieving such results. Currently, the legal framework works in such a way that the main development leverage for gambling business is the low tax, as well as substantial benefits for investors that invest funds in construction and operation of entertainment facilities. Therefore, legislationin this segment won’t be changed in the nearest future.

But there are some problems that bother legislators. That is the so called problem gambling, or in other words addiction to gambling, which is common for the majority of local people. In order to fight against gambling addiction, the Sectoral Economy Committee of the Georgian Parliament is drafting a bill that stipulates tightening of control over problem gamblers. But it will not influence the developmental prospects of the industry in any way.

What prospects does online gambling have in Georgia?

Vadim:According to the experts, as of 2016, around a half of Georgian gambling industry is represented by online gambling and fast-growing fantasy sports. Taking into account the rapid development of Internet gambling, one can assume that online segment will make up the lion's share of revenues in the total amount of gambling incomes in the upcoming years. And the development of gambling market in Adjara is facilitated by the inflow of foreign and local investments. Construction of complex facilities that house not only casinos, but hotels, yacht clubs, stores, SPA and fitness centers, restaurants, etc., has a positive impact on the tourist traffic, which is growing. As a result the number of gamblers is increasing as well.

What are the major players in this region? What are the characteristic features of their activities?

Vadim: Our Company focuses on online casino solutions mainly. The major players of online gambling in Georgia are Ajarabet and Europe-Bet, followed by two smaller casinos: Leader Bet and Crystal Bet. The main difference between the two giants: Europe-Bet offers poker, slots, bura, seka, dominoes, backgammon and various lotteries; Ajarabet offers live dealer casinos, sports betting and newest slots, daily jackpot is $45 thousand. As for the land-based gambling houses, I would highlight LeoGrand, Casino International and Casino Iveria.

In your opinion, what are the prospects for the development of new gambling segments?

Vadim: I believe that the main trend is to combine online and land-based projects. It’s a complicated task for any operator, but at the same time it’s a favourable format for the development of the whole gambling market in general.

Please, tell about blockchain technologies. What impact will they have on the future of online casinos? What are their advantages and disadvantages?

Nickolay: In my opinion, bitcoin is an ideal currency for online gambling. Its main advantages are anonymity, decentralization, availability from any corner of the world and transparency of financial operations. Today, the market share of bitcoin casino comprises over 20%, and this number is growing day by day. So the conclusion can be drawn that bitcoin is very popular among online casino players. As for disadvantages, I can only mention problems with exchange in some countries.

What recommendations can you give to those people who are determined to start an Internet business from scratch by opening an online casino?

Vadim: You will need some fresh idea to enter the online market. It applies to experienced owners of land-based casinos, as well as beginners in this business.

Nickolay: First of all it is important to study the market thoroughly and to be scrupulous about the selection of platform developer and game provider. Our Company provides consultancy services in this sphere, among other things. In general, to achieve success you need to work legally and only with original providers. Also, you should not cut costs on advertising, as far as good marketing makes up 90% of success of any online casino.

Thank you very much!

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