The Georgian Gambling Association (GGA) has issued a stark warning to the Ministry of Finance, claiming that the unlicensed “black market” in Georgia now generates over $742 million (GEL 2 billion) annually.
The GGA argues that the government’s plan to sharply increase fines for licensed operators will fail to address illegal behavior and instead cripple the regulated sector.
The Failure of the 2021 Tax Model
According to the industry group, the current surge in illegal gaming was catalyzed by the tax increases implemented in 2021. The association contends that these measures made it nearly impossible for local firms to compete with unregulated and offshore platforms, which now absorb a massive portion of the domestic wagering volume.
Giorgi Mamulaishvili, Head of the Georgian Gambling Association, criticized the government’s focus:
“Licensed businesses, which are subject to regulatory restrictions and compliance standards, are not the main source of worries over underage gaming. The industry has consistently offered to assist the government by providing resources and operational know-how targeted at curbing illicit supply.”
Proposed Penalties: A Multi-Fold Increase
Under the new legislative proposal, fines for licensed entities would skyrocket:
- Casinos: Fines jump from $2,600 to $7,400 (GEL 20,000).
- Gambling Clubs: Fines increase from $740 to $3,700 (GEL 10,000).
- Electronic Slot Salons: Fines rise from $370 to $3,700 (GEL 10,000).
The GGA argues that these penalties are “poorly targeted” because most violations in the legal market are administrative or technical glitches rather than intentional breaches. While the Ministry of Finance insists that enforcement against illegal activity is underway, the GGA maintains that the government’s evaluation of the illegal market’s scope is dangerously underestimated.
This policy gap highlights a growing divide between the state’s desire for immediate revenue through fines and the industry’s demand for a coordinated strategy against offshore competitors in the Georgian Market.
