11 Nov, 2021
From 2018, Geostat started to evaluate the activities of gambling enterprises with a new methodology, which had a significant impact on the turnover of enterprises in the relevant sector.
Until 2018, the turnover of the enterprises of this sector reflected only the amount of money deposited by the players, and according to the new methodology, which is governed by Geostat since 2018, the amount of bets made by players each time is reflected in the turnover.
The changes of methodological nature were preceded by a number of activities carried out by Geostat in 2018, in cooperation with international organizations and with the active involvement of representatives of the relevant field.
In addition, in July 2018, a Memorandum of Understanding was signed between Geostat and the Gambling Business Association, during which a number of working meetings were held. Representatives of companies in the field participated in the meeting together with the staff of Sakata and the Revenue Service. The aim of the cooperation was to provide business circles with quality information, to improve data accounting in the field of gambling business and to introduce international practice in the country.
The changes affected only the turnover rate, while other indicators, such as output and value added, were calculated using the same methodology as Geostat used in the previous period.
Due to the above, due to the different approach to accounting, the 2018 turnover of the gambling business sector is not comparable to the data of the previous period, however, the calculation of the data of the previous period is still not technically possible due to lack of relevant data.
According to international practice, the turnover rate calculated by this methodology is mainly used to assess the level of consumer activity on gambling and does not allow for a complete description of the sector.
To evaluate the activities of the gambling sector, it is recommended to use the output of the product, which is obtained by deducting the prize money (ie, the amount of profit) from the volume of turnover.
It should also be noted that the output of this sector is the sum of revenue from games (Gross Gambling Revenue - GGR), which remains after deducting the prize money, ie the amount issued in the form of profit.
To put it simply, the turnover that is often appealed to is simply the sum of the bets placed on the games. The stakes are often hypothetical and not really money, which can only be seen on the account of the person involved in the game. To make it clearer, the turnover according to the new methodology of Geostat is calculated as follows: if the player won 50 GEL 10 times with 10 GEL bet during the game and then lost this winning amount, the turnover according to the old methodology would be considered only 10 GEL, but the turnover with the new methodology will be 510 GEL . That is why there seems to be such a drastic change in the turnover of the gambling business compared to previous years.
To determine real income, we need to subtract the amount of turnover from the amount of profit issued.
For more clarity compare 2018 and 2019 turnover and revenue. In this case, 2018 is taken as the first year of a change in Geostat methodology. As for the 2020 data, Geostat will publish it in November.