Georgia is taking bold steps to become a global hub for online gambling operators by introducing favourable tax rates. The new tax regime is designed to attract foreign operators, positioning Georgia as a strong competitor to Malta and Curacao. With reduced taxes for targeting overseas players, Georgia aims to boost its gambling industry and stimulate foreign investment. Learn how this new tax regime could reshape Georgia’s gambling market and impact both domestic and international operators.
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Georgia Lowers Taxes for Online Gambling to Attract Foreign Operators and Boost Investment
The Parliament of Georgia has approved new tax amendments designed to create a favourable regime for online gambling operators targeting overseas customers. Set to take effect on December 1, this strategic move aims to transform Georgia into a competitive hub for global gambling, rivalling established markets like Malta and Curacao. By easing the tax burden on operators focusing on foreign players, Georgia seeks to attract significant foreign investment and encourage economic growth in the gaming sector.
Lower Taxes for Foreign-Focused Operators
The new regime introduces a series of tax reductions aimed explicitly at operators serving non-domestic markets. For land-based slot halls, the gross gaming revenue (GGR) tax will drop from 15% to 5% for revenue generated from foreign players. However, the 15% rate will still apply to domestic GGR, ensuring that local gambling activities remain closely regulated and taxed.
For online gambling operators, the changes are even more pronounced. Slots websites will now have to withhold 5% on withdrawals made by domestic players, while overseas players will be exempt from this tax. A similar measure applies to online casino sites, significantly lowering operational costs for those targeting foreign markets.
Online sportsbooks will continue to pay a 7% tax on bets placed by domestic customers. However, those that target foreign players will benefit from a reduced tax rate of 5% on GGR, making Georgia an appealing base for international sportsbooks looking to expand their reach.
Compliance and Licensing Requirements
Despite these attractive tax incentives, operators must adhere to strict compliance and licensing requirements. Under the Law on Organizing Lotteries, Games of Chance, and Other Prize Games, gambling operators need to obtain a permit from the National Revenue Agency. This process involves securing an authorization certificate from Random Systems Georgia, a company appointed by the Revenue Service to monitor gambling products and services within the country.
A Georgian online gambling permit allows operators to maintain up to two domains: one for domestic use and the other for international players. The cost of a permit varies depending on the type of gambling offered. For websites running online slots, the annual permit fee is GEL 1 million (€328,000), while online casinos are subject to an annual fee of GEL 5 million. Online sportsbook operators must also establish at least one land-based retail location, incurring an additional annual fee ranging from GEL 30,000 to GEL 300,000 depending on its location.
Operators of land-based gambling venues face quarterly fees of between GEL 250,000 and GEL 300,000. These financial obligations, though significant, are offset by the favourable tax regime for operators targeting overseas markets, making Georgia a compelling destination for international gambling businesses.
Tightening Domestic Regulations
While Georgia actively seeks to attract foreign gambling operators, it has simultaneously tightened regulations for the domestic market. In March, the Ministry of Finance updated its electronic register of citizens prohibited from gambling, ahead of new rules introduced on July 1. Under the updated Code of Administrative Offences, public sector employees and all individuals under 25 years of age are banned from participating in gambling activities, both online and at land-based venues.
The new rules, issued under an executive order signed by Prime Minister Irakli Gharibashvili, also prohibit individuals charged with local criminal offences from gambling. This comprehensive regulation automatically added 1,503,989 citizens to the list of those banned from gambling, including under-25s, state employees, and those with criminal records. Additionally, those who have self-excluded from gambling are included in this registry.
Gambling operators in Georgia must submit their customer databases for cross-referencing against this register. Any breach can result in fines of up to GEL 30,000 (€10,000), underlining the government’s commitment to responsible gambling and consumer protection.
Georgia’s introduction of a favourable tax regime for online gambling operators targeting foreign players marks a strategic shift in the country’s approach to the gaming industry. By offering reduced tax rates and creating a competitive environment, Georgia aims to position itself as a global gambling hub, attracting international operators and investment. However, the government balances this openness with stringent regulations for the domestic market, safeguarding its citizens through tighter age restrictions and a national self-exclusion scheme. As Georgia navigates this dual approach, it sets a compelling precedent for how countries can foster economic growth in the gambling sector while upholding strong standards of responsible gaming.