25 Nov, 2021
The Prime Minister of Georgia promises the population to first restrict gambling, and then to ban it altogether. This statement was perceived as a threat not only by the gaming business itself, but also by the media. Managers of television stations tell Radio Liberty that the gaming business is one of their biggest advertising customers.
"Programs sponsored by similar companies cannot exist, we keep them with their money. It will be a blow for any television, including government channels," says Thea Gvaramia, head of the sales service of "Main Channel".
"Formula" and "Main Channel" told RFE/RL that the gambling business covers 20-25% of commercial income of television stations by purchasing advertising or sponsorship packages, in 2020 it is more than 2 million GEL for "Main Channel" and more than half a million for "Formula" .
Prime Minister Irakli Gharibashvili says that online casinos and gaming businesses will first be banned from advertising, and then they will have to stop. The Prime Minister explained this decision of the government for several reasons.
"One billion five hundred million GEL is flowing out of the country through online casinos... Our youths are playing and losing money every day... This is related to drug addiction and the involvement of our youth in this very destructive movement," he said while explaining why the government wants to tighten legislation on the gambling business. towards.
"It was quite unexpected, because the Georgian government [until now] had a real approach to the gambling business - they make a big contribution to the country's budget," George Mamulaishvili, the administrative head of the gaming business association, told RFE/RL.
Gambling companies pay five types of taxes to the budget of Georgia at the same time. Profits, income taxes, VAT, like other companies, plus license and gaming business fees are added.
According to the association's calculations, over the last four years, the country's budget received more than 300 million GEL from this business, including 349 million GEL in 2020. This amount was more than 4% of the total budget of the country.
The amounts paid in the budget are increasing year by year - the exception is 2020, when the coronavirus pandemic began and due to restrictions, the game could only be played online.
The gambling business is an interesting field for foreign investors, as evidenced by the sale of shares in one of the largest companies, "Acharabet", in 2019. Three years ago, an Irish investor bought a 51 percent stake in the company for 115 million euros.
The general director of "Formula" Zuka Gumbaridze, who has many years of experience in selling advertisements, says that the populist initiative of the prime minister has created a threat to the country's investment environment.
"There was the most dangerous message to investors from the prime minister, who does not understand finance or legal issues. They are going to adopt this law probably so that less money goes into the critical media - otherwise they will find a way to compensate the government media," he says.
The chief executive of the Gambling Business Association is hard pressed to say exactly how much damage the industry will suffer until he sees the bill, but what he does say is that with internet technology so advanced today, it's virtually impossible for gamblers to find another way to access the service, such as Abroad, which means that the service will be followed by money outside the country.
"Not only the state will be affected by this, but also the people who play - no one knows what the regulations are there [in another country]," says Giorgi Mamulaishvili, who does not rule out that the rules of the 90s game will be restored in the country - When this underground business flourished with its revenues bypassing the state.
From 2006 to 2020, the turnover in this business increased 1000 times, from 30 million to 32 billion GEL. In the same period, the number of employees almost doubled and by 2020 it was close to 10,000. According to Saxstat data, the wages and average salary of persons employed in this field were increasing, which increased from 180 to 1600 GEL in the same period.
Despite the fact that the fate of many people and companies depends on this business, the Prime Minister calls it robbery of the population.
As Irakli Gharibashvili said on November 23, next Monday, the Minister of Finance will speak about the details of the bill at the government meeting, and then the government will ask the parliament to initiate it.