Opening a Gambling Business in Georgia: Peculiarities of the Market, Licensing, and Taxation

Opening a Gambling Business in Georgia: Peculiarities of the Market, Licensing, and Taxation

Today Georgia is one of the few countries where businesses pay low taxes. According to the law “About entrepreneurs”, local citizens and foreign nationals have to follow the same rules of running a business. With these advantages in mind, it is beneficial to open a company here.

The gambling business has been legalized in the country, and gambling facilities enjoy popularity among locals and tourists. Therefore, the opening of a casino or a betting shop is a nice opportunity to grow capital. Read more about starting a gambling business in Georgia further in the article.

Gambling business in Georgia: current state

Opening a Gambling Business in Georgia: Peculiarities of the Market, Licensing, and Taxation - 1

Today it is allowed to set up land-based and online gambling facilities in Georgia. The gambling business is regulated by local law.

According to the Revenue Service, 242 permits for conducting gambling activity were issued in Georgia, 75 of them – for the organization of totes.

At the end of 2017, the gambling business turnover reached around $2.2 billion in the country. This figure exceeds the turnover of local stores by almost $614 million.

Referring to BPN agency, Axali taoba newspaper informs that the volume of bets on Georgian totes equaled to around 1.3 billion GEL in 2018, which is by 22% more than in 2017.

Despite such good results, authorities are taking necessary measures to prevent under age individuals from gambling. Today Georgian casinos and slot machines parlors restrict access to people under 21 years old. Registration at online gambling platforms is available for users aged 18 or more.

How to open your own business in Georgia?

At first, one has to register a company. This procedure is run by the National Agency of Public Registry (NAPR) under Ministry of Justice of Georgia.

Registration of business takes place in Houses of Justice. The entrepreneur has to fill in all the documents and pay taxes in one of these institutions. If the businessman does not know Georgian language, he will need an interpreter to help him study the documents.

Further, it is necessary to undergo VAT registration and receive the status of an electronic taxpayer. For this to happen, one has to turn to the Revenue Service with a corresponding application.

It is important that the state does not set requirements to the minimal registered capital. Therefore, the company owner can withhold this data (except for those who open a bank). A citizen of any country can manage the company.

Business registration is not enough to open a gambling facility. Another thing to do is to acquire a license.

Licensing of land-based gambling business

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To start running a land-based gambling business, one needs a corresponding license. Today Georgia issues several types of such permits: for a casino, slot machine parlor, tote, bingo, lotto, incentive drawing. The first five are valid within five years, and the incentive drawing license – for one year.

Entrepreneurs that obtained the license for setting up a casino and/or slot machine parlor in Tbilisi can receive a permit for opening a gambling club.

Conduct of lotteries is possible for individuals that have won the tender organized by the Ministry of Finance of Georgia. They have to allocate a certain percentage of the total cost of sold tickets to the state budget annually.

Documents needed to obtain the license are submitted electronically. The list of documents is different for each type of gambling activity. Some of the main documents are:

  • excerpt from the document about business registration;
  • list of card games and slot machines offered by the company and their rules;
  • for the casino license: police clearance certificate of owners and executives;
  • layouts of chips and/or tickets, etc.

A standalone permit is issued for each type of the gambling activity. If the entrepreneur decides to open, for example, a casino and a betting shop, he has to get two licenses.

As for its price, it is issued free of charge. The application is considered within 20 days. However, if the organizer wants to get it quicker, he will have to pay from 400 to 2,000 GEL ($147-735) and the period for issuing will shorten to 1-10 days.

Fees and taxes

Gambling activity is taxable in Georgia. Gambling operators have to pay annual fees, the amount of which depends on the region. For example, the fee in Tbilisi is 5 million GEL (around $1.8 million), in Batumi, Kobuleti, Borjomi, Kachreti – 250 thousand GEL (over $91,000), in Akhaltsikhe – 100 thousand GEL (over $36,000).

In some towns (for example, Batumi, Kobuleti, Khelvachauri, Anaklia, Kazbegi, Bakuriani), organizers of gambling activities are exempt from the annual fee in case the casino comes with an 80-100-room hotel. Local authorities take care of the development of the tourism industry in such a way.

Besides, operators pay quarterly fees, the amount of which depends on the type of the license.

Owners of the land-based gambling business have to pay real estate tax and corporate tax as well as income tax. Tax dodgers can expect a fine equal to 100% of expected tax amount that the organizer of gambling activities has to pay for a certain facility.

Licensing and taxation of online casinos

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As for conduct of online gambling activities, the Georgian law does not imply a standalone online gambling permit. Only owners of legal land-based gambling facilities located on the territory of the country can organize online gambling activities.

Online gambling is arranged using mobile apps and special terminals. Georgian organizations are not allowed to provide users with access to offshore companies. What is meant here are casinos that acquired gambling licenses in other jurisdictions, for example, Curacao, Malta, etc.

Organizers of online gambling business also pay real estate tax, corporate tax, and income tax. The amount of quarterly state fees ranges from 250,000 to 300,000 GEL. On each territory, local authorities define the sum.

Conclusions

Today Georgia is not only the place with beautiful nature, hospitable citizens, and delicious national cuisine. This is a place where both Georgians and foreigners can run a business. The procedures of business registration and license acquisition can take from several days to one month. Thanks to this, entrepreneurs can manage organizational tasks in a short time and start developing their business.

However, to avoid difficulties when opening a gambling facility, you should consult with specialists for the start – they will tell you about all legal aspects of running a business.

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