Gambling in Georgia – Balancing Prosperity and EU Concerns

Georgia's lucrative gambling industry poses a dual challenge – robust revenues and EU concerns.

In the realm of gambling investments, Georgia stands out as a highly promising country in its region. The nation's legislative landscape demonstrates a remarkable degree of openness towards the gambling sector, attracting hordes of tourists from neighboring Turkey, Azerbaijan, and Iran. The prohibition of money gambling in these countries propels visitors to Georgia's bustling land-based establishments.

Favorable Legislation for iGaming and Slot Machines

Georgia's progressive stance on iGaming and slot machines is governed by the Law on the Organization of Lotteries, Gambling, and Other Prize Games, enacted in 2005. While regulatory adjustments have occurred over time, the overarching ethos remains remarkably accommodating for both players and industry stakeholders.

The country permits casinos, slot machines, and online gambling. While opulent land-based casinos cater primarily to tourists, the local population favors slot machines. Notably, Georgia bucks the trend by lacking location restrictions for slot machines – they can be found in diverse settings such as shopping centers, near bus stops, and even within restaurants and cafes.

Initially, the legal age for online casino registration was 18; however, in late 2023, the Georgian Dream party modified the legislation, raising the minimum gaming age to 25. Registering on gambling platforms merely requires a phone number, but critics argue that this simplified process raises concerns about compliance with gambling laws. Analysts highlight that Georgia's lax regulations make gambling easily accessible to minors, particularly in the realm of online gaming. 

Casinos in Georgia – Driving Tourism and Economic Prosperity

In the vibrant city of Tbilisi, the hallmark of luxury is not just five-star premium hotels but also the inclusion of casinos within almost every establishment. These land-based gambling havens serve as the capital's signature. Specifically designed for visitors from neighboring countries where gambling is forbidden, these establishments contribute significantly to Georgia's tourism appeal. However, the crown jewels of the Georgian casino scene are found along the enchanting Black Sea coast in Batumi. This seaside haven, boasting excellent transport connectivity, attracts a plethora of tourists. Every weekend witnesses an influx of Turkish gamers, seeking the thrill of roulette or poker. Guests from Iran, Azerbaijan, and Russia also contribute to the vibrant gaming atmosphere in Batumi.

The year 2023 saw the Georgian state budget receiving a substantial 890 million lari (approximately $342 million) from the gambling sector, as per official records available on the parliament's website. To put this into perspective, the 2022 income from gambling amounted to GEL 739 million, reflecting a remarkable 65% increase compared to 2021.

Breaking down the 2023 budget revenues, 63 million lari are attributed to permitting fees, 141 million lari stem from gambling-related fees, and a substantial 686 million lari are generated through taxes. In a country grappling with a complex and unstable economic system, the gambling sector emerges as a standout contributor to the national budget. Beyond its financial impact, the industry plays a pivotal role by generating employment opportunities and making significant tax contributions.

Gambling Business and EU Accession – Addressing Regulatory Challenges

The lax regulation of the gambling sector in Georgia has raised concerns, particularly regarding the vulnerability of young individuals, including children, to potential gambling addiction. Despite formal legal protections for children against gambling, the prevalence of gambling advertisements and the widespread placement of slot machines, including near schools and childcare centers, poses a significant risk. The accessibility of gambling platforms through phone number registration further compounds the issue. The country faces a concerning rate of suicides among young people linked to gambling addiction, acting as a stumbling block to Georgia's aspirations for EU accession.

The European Parliament has set forth 12 conditions that Georgia must meet to qualify for European Union membership. Notably, one of these conditions focuses on regulating the gambling sector. In response, the Ministry of Finance introduced a legislative package in 2023 to systematically regulate online gambling and profitable games. The changes established new licensing activities, specifying conditions for permits, permit fees, responsibilities for compliance, and deadlines for annual permit fee payments.

The alterations, implemented at the close of 2023, also saw an increase in gambling tax rates, contributing an additional GEL 400 million in 2024. The revised legislation prohibited citizens under the age of 25, as well as those listed as dependent persons, from participating in gambling activities.

The Ministry of Finance, responsible for overseeing gambling activities, reported 12,864 registered individuals on the list of gambling addicts. Among them, 45 people were registered based on judicial decisions, while 12,819 voluntarily sought inclusion on the list. Additional restrictions were imposed, including a list of individuals prohibited from gambling, such as civil service employees, officials in public positions, and politicians engaged with national regulatory bodies.

In a bid to align with EU standards, the Georgian government is actively working to tighten gambling legislation, aiming to bring the country closer to fulfilling the criteria for EU membership.