Decision to invest into Georgian casino industry involves navigating through a complex landscape of regulatory frameworks, operational costs, and potential returns. This is a brief guide to annual license fees applicable to land-based, live gaming casinos - providing insights into financial considerations that potential investors must weigh.
Casino License Fee Variability Across Regions
The annual license rates for operating a casino vary significantly depending on the location within Georgia. Tbilisi, the capital and largest city, imposes the highest license burden of 5,000,000 GEL (1.8 million USD) annually. This reflects the status of the capital Tbilisi as the primary economic hub and a major tourist destination within the country.
In contrast, several municipalities such as Akhaltsikhe, Batumi, Dusheti, Kobuleti, Borjomi, and areas like the Bazaleti Lake surrounding area, each levy a considerably lower annual fee for operating casino of 250,000 GEL (90,000 USD). These locations are strategically chosen to encourage economic development and tourism outside the capital.
Strategic Incentives for Casino Investment
Several municipalities offer substantial incentives to attract investors into opening live gaming casinos, such as a FREE yearly license fee in designated areas. Kazbegi, Tskaltubo near Kutaisi, Signagi, Bakuriani Township, and Gudauri are among the regions where live-casino operators are exempt from paying yearly license fees, aiming to stimulate economic activity and tourism in these relatively less-developed areas.
Andrey Ivankin has been a lead project manager for numerous new casinos in Georgia and abroad, offering a further insight into investor incentive schemes available:
"Investors should bear in mind that operating slot machines at the casino is subject to a separate licensing fee, but in some regions, such as Batumi (Adjara) there is an option to get a slot operator license for free for a period of up-to 10 years. For that casino needs to be opened at a hotel with over 100 rooms and hotel should be operational".
Comparative Investment Attractiveness
The attractiveness of each location for casino investment can be evaluated based on a combination of factors, including licencing & tax burden, local economic conditions, tourism potential, and infrastructure development:
1. Tbilisi: Despite the highest casino license rate, Tbilisi offers a dense population base, robust tourism infrastructure, and a vibrant urban economy, making it potentially lucrative for high-volume casino operations catering to both locals and tourists.
2. Batumi and Kobuleti: These coastal municipalities benefit from their proximity to the Black Sea, attracting tourists seeking entertainment options. With moderate license rates and established tourism infrastructure, these areas present a balanced investment opportunity.
3. Free Casino License Zones: Municipalities like Kazbegi and Bakuriani offer a unique proposition with zero license fees, appealing to investors looking to minimize operational costs and potentially leverage government incentives for development.
4. Other Municipalities: Places such as Akhaltsikhe, Borjomi, and Dusheti, while offering lower casino license rates compared to Tbilisi, may appeal to investors seeking a quieter market with potential growth prospects in local and regional tourism.
Conclusion
In conclusion, the decision to invest in the casino industry in Georgia involves careful consideration of tax & license costs, local economic dynamics, and strategic incentives offered by different municipalities. While higher casino license fees in major cities like Tbilisi may initially appear daunting, the potential for higher revenues driven by greater population density and tourism footfall needs to be weighed against lower operational costs and potential growth opportunities in emerging tourist destinations and free tax zones. Ultimately, investors should conduct thorough feasibility studies and engage with local authorities to capitalize on the diverse opportunities presented across Georgia's casino market.
This short guide does not cover other forms of taxation, including: slot annual license fees, quarterly table/slot taxes, GGR taxation on certain types of gambling equipment, service fees for the monitoring system, player withdrawal tax and dividend taxation rates.
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