Georgian Trade Group Protests Ad Ban Plan

December 14, 2021
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The Georgian gambling industry has hit back at plans by the Prime Minister to introduce an advertising ban and hike online casino taxes.

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The Georgian gambling industry has hit back at plans by the Prime Minister to introduce an advertising ban and hike online casino taxes.

In a recent speech, Prime Minister Irakli Gharibashvili pledged to ban all gambling advertisements in Georgia, increase taxes by 65-70 percent for online casinos and raise the age limit for gambling to 25 years old.

He also outlined plans to create a widespread list of people that would be banned from gambling: "These are socially vulnerable people who receive assistance from the state, civil servants, persons who apply to the Revenue Service with a requirement to apply the self-restraint mechanism, as well as persons who fall into the so-called blacklist, based on a court decision.

“The circle of persons for whom access to gambling will be restricted will generally be up to 1 million adults."

With a population of only 3.5m, the number of people who would be banned from gambling in Georgia would amount to well over 30 percent of the adult population.

The Georgian Gambling Association (GGA) has responded with dismay to Gharibashvili's proposal.

Giorgi Mamulaishvili, the trade group’s head, complained in a statement that the government only communicates with the gambling industry through the media and ignores the views of the sector.

"It is categorically unacceptable to adopt such changes in an accelerated manner, because, in our opinion, it is necessary to consult, calculate and model in advance what kind of economic effect these changes will have,” he said.

In the current context, Mamulaishvili said, if the government does not engage in a constructive dialogue with business, the industry will be forced to “optimise costs”, including cutting funding for a number of social projects and sports sponsorships.

During his speech, the Prime Minister also alleged that foreign-owned online operators withdraw $1.5bn from the country every year.

The trade group argues this figure is greatly exaggerated and does not account for huge investments offshore companies are making within Georgia.

But equally the trade group argues international operators should not be vilified for turning a profit.

"These sums are wrong. I can tell you that quite a lot of investments are coming to Georgia from exactly those foreign partners. Investment means that when a person invests money, he has to get it back,” said Mamulaishvili.

The association also claims the industry is paying the highest average salaries in the country, normally 50-100 percent higher than in other sectors of the Georgian economy.

Thousands of people are employed by gambling companies, supporting dozens of thousands of their dependents, the trade group said.

Major Georgian online casinos Adjarabet, Crystalbet and Europebet are locally founded companies, which after a period of initial growth were acquired by international giants Flutter, Entain and Betsson, respectively.

These deals have provided dozens and hundreds of million dollars of investments into the Georgian economy, Mamulaishvili argues.

The trade group chief said he worried that if the market rules change so unpredictably and radically, the broader business world will view Georgia as unattractive for international investment.

The government has promised to submit a bill that would make the Prime Minister’s desired changes to parliament this month.

However, reports by TV channel Formula suggest that Gharibashvili could be preparing to step down in December.

The outlet cited an apparently leaked video, where Bidzina Ivanishvili, a local oligarch and the alleged grey cardinal of Georgian politics, says he is not happy about the Prime Minister's stewardship of the country’s economy.

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