The Revenue Service of the Ministry of Finance of Georgia (RS) is inviting expressions of interest in the country’s gambling control regimen. The Revenue Service seeks candidates or corporate groups interested in collecting and providing data to them so that they can determine with certainty if taxes are being collected properly and if the holders of gambling licenses are fulfilling all other requirements. The government currently lacks some of the detailed information it needs to conduct comprehensive control of the market.
The work is expected to commence Jan 1, 2018, but implementation will depend on the particular solutions proposed. The deadline to request clarification of any items contained in the documents is November 3, 2017. The government had originally planned to release a shortlist of candidates by Sept 4 but is still accepting expressions of interest in order to make the process as competitive as possible. Individual candidates and corporate groups are invited to inquire. Requirements for an Expression of Interest can be found here.
According to the government: “The Shortlisted candidates will be sent the request to submit full technical and commercial proposals regarding the project, including proposals related to projecting, construction, exploitation and financing. In the request to submit the proposal will be provided conditions offered in the Investment Agreement.“
The RS licenses and administers all gambling businesses in Georgia and is responsible for tax collection. Each form of gambling service is taxed differently. There are currently 7 casino licenses and 7 bookmaking licenses under RS control. The RS monitors some 4,886 slot machines. Their land-based casino licenses can also allow for online gambling services. Currently, no separate online licenses are issued.
The gambling industry in Georgia has grown steadily since the Rose Revolution of 2003. Prior to that Georgia was, like many post-Soviet states, rife with political corruption. The World Bank and the Organization for Economic Co-operation and Development (OECD) said in 2014 that low-level corruption had been virtually eliminated in the country.
Businesses are drawn to Georgia not only for the resorts on the Black Sea in Batumi and old world charm of Tbilisi but also because there is very little red tape or bureaucracy involved when registering a new enterprise or applying for licenses. Some reports indicate that by filing a “fee to expedite” a five-year license can be obtained or the application rejected the next day. The standard response time is a mere 20 days.
Visa requirements are simplified, and in the case of nearby countries that restrict gambling to far-away places or ban it altogether – such as Azerbaijan, Iran, Russia, and Turkey – no visa is needed at all. Gamblers from these countries spend about $1.7 billion per year in Georgia, according to a report last year on Slotegrator News.
Online gambling operations are taxed at just 5% while the range for other gambling institutions is between 12% and 20%.
There are several casinos in the capital city of Tbilisi, including Casino Iveria Tbilisi and Storm International’s Shangri La. The seaside town of Batumi is home to Casino International and the Leogrand Hotel and Casino.
For those seeking to express interest in the government’s invitation in regard to the control of gambling business in Georgia: Among other requirements, the successful candidate will need to be able to deliver information to the RS such as total coin in/coin out for each machine to determine win percentages; for electronic gaming, including casinos and clubs a monthly history of transactions must be tendered. Electronic transactions must be reported in near real time. For bookmakers, they will need audited numbers, and from casinos, they will need to know the “amounts received/given out/tokens in the cashier and on each playing table.”
All information collection mechanisms are clearly spelled out in the Invitation to Expression of Interest.
This article has been updated throughout in order provide more clarity.