Casinos

The Georgian government is pinning its hopes mainly on tourism to boost its economy. Last autumn, the Prime Minister stated that the country hopes to host eight million tourists a year by 2020. And they are well on their way to achieving that goal. More than six million tourists visited Georgia last year. The government even planned an advertising campaign surrounding the visit of 2016’s six millionth tourist.

According to the World Bank:

“Tourism is one of the fastest growing economic sectors in Georgia – total contributions accounting for 23.5% of Gross Domestic Product (GDP) and 20.1% of total direct and indirect employment in 2015. The sector also currently provides as much as 36.4% of total export earnings.”

One draw is the casino scene. Georgia is well placed to take advantage of the gambling market. Most tourists come to Georgia from the neighboring countries of Russia, Azerbaijan, and Turkey. All three have strict anti-gambling laws. Azerbaijan and Turkey have banned casinos altogether, while Russia only allows them to operate in strategic locations, targeting tourists themselves. In 2009 Russia banned casinos in all but 4 enclaves: Kaliningrad, Krasnodar, Altai in eastern Siberia, and the Far East. But at the time, little infrastructure had been built.

More recently, Sochi has been added to the list. The hopes that Russia had placed in making the 2014 Olympic site of Sochi a tourist mecca for winter sports enthusiasts have not panned out. The government has instead turned to casinos to make up for the disappointing returns on their infrastructure investment. The first casino was officially opened on 5 January 2017.

In Georgia, meanwhile, the casino industry has been growing, as the government has tried to make the market attractive to investors, offering incentives like a flat tax, no income tax, and no tax on payouts. Earlier this month, the third annual Georgia Gaming Congress took place in Tbilisi, bringing together representatives from the government and various players in the gambling industry.

And it seems to be paying off.

In 2011, gambling contributed to government coffers the [Georgian currency] lari-equivalent of just about $7.3 million.”

Just two years later, according to a 2014 report by Transparency International Georgia,

“…the turnover of gambling and other gaming companies totalled approximately GEL [Georgian Lari] 1.213 billion while duties collected from permits were over GEL 105.2 million, making up to 1.4% of the 2013 state budget revenues.”

Trasparency also found:

“As of 1 October 2014, there are 94 gambling or gaming companies operating in Georgia. This list includes 32 large companies. Most companies are operating in Tbilisi, followed by Batumi and Kutaisi.”

The owner of stakes in several of the casinos in Georgia appears to be Davit Yakobashvili. Yakobashvili has been involved in the casino business since the 1990s, opening one of the first casinos in Moscow (shut down by Putin’s 2009 order).

In an interview [Rus] last year, Yakobashvili stated he saw no problem ethically with having interests in casinos.

“There are people who need an adrenaline rush… and they find it at the casino. By the way, I myself don’t play, I’ve never liked it, but I don’t blame anyone either.”

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