4H Materials

Gambling taxation changes in Georgia

According to SBC CIS, Irakli Garibashvili, Prime Minister of Georgia, at a government meeting, said: "The profit tax of the gambling business will be increased from 10 to 15%, while the cash withdrawal tax will be 5% instead of 2%”.

Irakli Garibashvili noted that these changes will add another 400 million lari to the budget.

Dmitry Hotsyn, Senior Consultant at 4H Agency, has commented on the situation:

"Following the recent introduction of advertising restrictions and the increase in the minimum player age to 25, the Georgian government continues to tighten requirements for legal operators. Most likely, after the adoption of these initiatives, we will witness a further surge in illegal operations. With the rise in taxes, legal operators, from a business perspective, will struggle to maintain a competitive edge against offshore companies. Illegal businesses, unburdened by taxes, can offer attractive bonus programs and are not restricted in any way from internet advertising.

An essential factor is the increase in the tax on winnings, as illegal operators do not face such deductions. This will lead to a shift of players from legal operators to illegal ones.

If events unfold according to this scenario, the development of the legal market in Georgia will significantly slow down. Even if the government acknowledges its mistakes and aims to rectify the situation, it will find itself in a less favourable position concerning the ratio of legal to illegal operators compared to the current state.

We can anticipate observing the results of such changes within the first year of the new regulatory rules".