Gamble License in Georgia

Permits and License for gambling business in Georgia

We discuss type of permit / gamble license issued for the gambling business in Georgia. The fees of permit / gambling license, taxes, the list of required documents. Also, we discuss difficulties with obtain gambling license, and other gambling license cost.

Type of Gamble License / Permits in Georgia

The Law of Georgia on Licenses and Permits lists following types of permits issued in the field of gambling business:

· Permit to set up a casino – represents casino license;
· Permit to set up a gambling club;
· Permit for delivery of gambling and / or winning games;
· Permit to set up a slot club;
· Permit to set up a betting house;
· Permit to organise lotto games;
· Permit to organise bingo games;
· Permit to organise promotional lotteries.

Definitions of gambling related businesses

Georgian legislation defines each type of gambling as follows:

Casino

A special gaming facility, in which an organizer of games holds games of chance and draws cash prizes. It is done by means of roulette wheels (roulette), cards, gaming tables, card tables, dice and/or other gaming equipment (except of gaming machines).

Gaming club

A specially arranged building and structure or a part of the area of a building and structure (including a part of an allocated area), where a card table(s) is placed, and which may not be seen from the outside of the building and structure;

Delivery of gambling and / or winning games

Direct and / or indirect supply of essential products / services to the organizer of the game and / or to a person outside the territory of Georgia. It is provided on the basis of a permit issued for gambling and / or winning games. It may affect the results of gambling and / or winning game with or without the participation of a gambling and / or winning game provider.

Slot club

A specially arranged building and structure, or a part of a building and structure (including a separate part of an area), where gaming machines are located. Gaming machines located in the slot club may not be seen from the outside of the building and structure.

Lotto

A game for a group of people, in which a player selects a combination of numbers or symbols and in which winnings depend on a complete or partial match of the selected combinations of numbers or symbols. Amount of winnings is determined on the basis of the amount of prize money. Lotto shall be held in a specially arranged building and the maximum number of its participants shall be determined by the number of players’ seats.

Bingo

A game for a group of people during which winnings are recorded by means of a tombola scorecard or an electronic scoreboard where the combination of numbers is drawn by a specially designed device match, and in which the amount of winnings is determined on the basis of the amount of prize money. Bingo shall be held in a specially arranged building and the maximum number of its participants shall be determined by the number of players’ seats provided in such building.

Promotional game

A game where an operator organises the drawing of prize money in accordance with published and predetermined terms and conditions. The selection of a winning ticket shall be determined by a chance event and may not depend on the wish of an operator or any other person or may not be specially pre-arranged. Promotional games are held in order to increase the sales of products (services) quickly and effectively as well as in the cases determined by the Government of Georgia.

Tickets of promotional games shall be distributed free of charge. A permit to organise promotional games shall be issued to a manufacturer or a representative of the manufacturer of a specific product (service), except for the cases determined by the Government of Georgia. No payments in any form for participation in promotional games shall be permitted;

Issuing and revoking gaming business permits, making changes to them, and entering them into the permit register is carried out by the Revenue Service or a relevant body that has delegated authority in accordance with the legislation of Georgia.

List of Documents shall be prepared and submitted to get a Gambling Permit

Since the types of permits are different, submitted documents differ depending on the specific type of gambling business. The list of documents is determined by the legislation of Georgia, however, it may be necessary to submit additional documents based on the request of the relevant authority.

Necessary documents that must be submitted by the permit seeker regardless of the type of permit:

· Application, prepared in accordance with the rules determined by administrative law;
· Extract from National Agency of Public Registry (Data of the Company);
· Document proving the origin of funds required for the payment of the permit fee;
· The document evidencing payment of a permit fee;

Additional documents to be submitted in case of starting a casino:

· the provisions (regulations) for organising a casino, which shall include:
o a list of gaming tables and/or card tables in a casino, indicating the brand name, factory serial number, the year of manufacture and the country of origin;
o the minimum and maximum amount of bets;
o the rules of operation of the casino;
o the code of conduct in the casino;
o the gaming rules in the casino;
o where there are card tables, the percentage of service fees;
o the deadline and venue for the distribution of winnings;
o the period for reviewing claims;
· samples of casino chips;
· certificate of conviction of the director(s) / founders / ultimate beneficial owner’s. The certificate of the conviction must be issued by the relevant competent authority of the country of which the person is a citizen;
· certificate of authorization certifying compliance of the essential products / services used with the standards / requirements introduced / set by the Minister of Finance of Georgia;
· any other document / information might be required by the Revenue Service when considering a permit seeker application and making a relevant decision.

In case of starting a gambling club:

· a permit applicant shall submit to the Revenue Service the provisions (regulations) for organising gaming clubs, which shall include the following:
o a list of card tables in the gaming club, indicating the brand name, factory serial number, the year of manufacture and the country of origin;
o the amount of service fees per card table;
o the rules of operation of the gaming club; the code of conduct in the gaming club;
o the gaming rules in the gaming club;
o samples of gaming chips (if any).
· certificate of authorization certifying compliance of the essential products / services used with the standards / requirements introduced / set by the Minister of Finance of Georgia;

Games which are not included in the provisions (regulations) for organising the gaming clubs may not be held in the gaming club.

In case of starting a slot club:

· the provisions (regulations) for organising a slot club, which shall include (Incomplete list):
o the time limit and venue of holding the games of chance;
o a list of gaming machines (except for games organised in a system based and electronic form) indicating the brand name, modification, factory serial number, the year of manufacture and the country of origin, the minimum and maximum rate of bets and the amount of maximum pay-out on each gaming machine;
o a list of games played in the gaming club and their playing rules;
· certificate of authorization certifying compliance of the essential products / services used with the standards / requirements introduced / set by the Minister of Finance of Georgia
· In accordance with the the provisions (regulations) for organising a slot club, a certificate of authorization of the specific game content in each gaming machine;

In case of starting a winning games (betting house / lotto / bingo and promotional lotteries) the permit seeker must submit to the Revenue Service to obtain a permit (incomplete list):

· an agreement between the permit applicant and a person who issues tickets for prize games (except for games organised a system based and electronic form), indicating the amount of tickets to be issued;
· the provisions (regulations) for the organisation of prize games, which shall include:
o the time limits and venue for holding the prize games;
o the period for reviewing claims;
o the quantity and numbering of winning tickets;
o the location, date and deadline for distributing the prizes of prize games. The total period for the distribution of prizes of prize games shall be not more than 30 calendar days following the date of the draw. The winnings shall be distributed no later than six days after the submission of the winning tickets;
o In case of setting up a betting house - the number of POS terminals to be used must indicate the details of the authorization certificate;
o In the event of arranging a betting house, lotto or bingo - a list of winning games and a detailed description;
o in the case of organising promotional games, the prize money, prize list, quantity of prizes, unit price of each prize and the sequence of prizes in a draw;
o in the case of organising promotional games, the date and venue of the draw for prize money;
o a sample ticket of the prize game with marks for protection against counterfeiting. The sample ticket shall be signed by the permit applicant;
· certificate of authorization certifying compliance of the essential products / services used with the standards / requirements introduced / set by the Minister of Finance of Georgia.

In case of delivery of gambling and / or winning games:

· A list and detailed description of the games and/or essential products/services to be delivered;
· certificate of authorization certifying compliance of the essential products / services used with the standards / requirements introduced / set by the Minister of Finance of Georgia;
· certificate of conviction of the director(s) / founders / ultimate beneficial owner’s. The certificate of the conviction must be issued by the relevant competent authority of the country of which the person is a citizen;
· any other document / information might be required by the Revenue Service when considering a permit seeker application and making a relevant decision.

Definition of Certificate of Authorization and of the selected person: Random Systems International (RSI)

The purpose of the authorization is to determine the compliance of gambling and / or winning games, as well as some essential products / services with the standards / requirements and compatibility with the electronic control system.

Certificate of Authorization is issued by the selected person: Random Systems International (RSI). The selected person: Random Systems International (RSI) is the person selected by the Revenue Service for the purpose of implementing and operating the electronic gaming business control system.

RSI has an electronic control system of gambling business, to which the permit seeker shall be integrated.

Authorization consists of 3 stages:

A) initial system survey;
B) Integration with the system;
C) Issuance of a certificate.

Fee for initial research / authorization certificate issuance for the gaming system and / or essential products / services by the permit holder / applicant – shall be not more than 35,000 GEL per each activity direction.

If the permit holder makes a substantial change to the gambling and / or winning games, as well as some substantial products / services and / or it plans to make such a change, it shall apply to the RSI in advance for re-authorization.

The permit holder is also obliged to apply to the RSI for re-authorization in some cases. Namely, if there is a change in the standards / requirements introduced / set by the Minister of Finance of Georgia for gambling and / or gambling, as well as some essential products / services. The permit holder must apply to the RSI no later than 3 months after the change, if there is no other time frame defined by law.

Permit fee rates

Permit fee rates are different depending on the type of permit, and there are also certain benefits if you open a gaming business in some regions of Georgia.

Fee for setting up a casino:

Across the entire territory of Georgia (except for the exceptional areas, which we will talk about below) - not more than GEL5mln per year;

As for the following places, Batumi, the surrounding area of Bazaleti Lake of Dusheti Municipality, as well as Kobuleti and Borjomi municipalities, the fee for setting up casino is GEL250,000 per year;

A permit fee need not be paid for setting up a casino in Gudauri recreational territory, in the territory of settlement of Bakuriani, as well as in the territories of Tskaltubo and Signagi Municipalities.

A person who holds a permit to set up a casino in the city of Tbilisi, may set up not more than three gambling clubs in any territory of Georgia without paying a permit fee for setting up gambling clubs

Fee for setting up a gambling club

setting up a gambling club - from GEL10,000 to GEL50,000 per year.

A person who holds a permit to set up a slot club in the city of Tbilisi, may set up one slot club in any territory of Georgia without paying a permit fee for setting up a gambling club.

Fee for setting up a betting house

Fee for setting up a betting house is from GEL 30,000 to GEL 300,000 per year. The Government of Georgia shall establish permit fee rates for setting up a casino, within the given rates.

Fee for setting up a slot club

Fee for setting up a slot club is from GEL 50,000 to GEL1mln per year.

A person who holds a permit to set up a slot club in the city of Tbilisi, may set up one slot club in any territory of Georgia without paying a permit fee for setting up a gambling club.

It should be noted that the Government of Georgia may increase a slot club permit fee rate by a maximum of 30%, during 5 years after its entry into force, within the limits of the rates specified by law.

Fee for setting up a lotto and bingo (each type) is GEL15,000 per year.

Fee for organising promotional lotteries – GEL15,000.

Annual fee for Provision of gambling and/or winning games is GEL100,000.

The ordinary time for issuance of the permit is 20 days after submission of the application (within 20 working days it is free, but accelerated timeframes might apply if the client pays respective amount of money, determined by law).

Gambling business quarterly fees

Gambling business fee rates are differentiated according to the type of gambling business:
On each casino table - from GEL20,000 to GEL40,000 per quarter;
For each slot machine - from GEL2,000 to GEL4,000 per quarter;
10% of the prize fund per promotional lotteries;

Where games are organized in a system-electronic form (except promotional lotteries) - from GEL250,000 per quarter to GEL300,000 ;

For setting up lotteries - 10% of the difference between the total value of sold lottery tickets and the prize fund;

On each gaming club table - from GEL4,000 to GEL14,000 per quarter;

On each cash register of gambling and/or winning games arranged in system-electronic form placed outside the facility organized with the permission to arrange gambling and/or winning games - from GEL1,500 per quarter to GEL20,000.

A lot of changes were made in the law of Georgia on Organising Lotteries, Games Of Chance and other Prize Games which came into force in 2022. Based on the changes, restrictions were imposed on the gaming business and taxes were increased. Here is a incomplete list of restrictions:

· An age limit has been set for participants in gambling and winning games, in particular, Georgian citizens under the age of 25 or foreign citizens/stateless persons under the age of 18 are not allowed;
· There is created a database of addicted persons;
· There is created a list of prohibited persons (participation in the games are prohibited for: state employee, civil servant, political official, person employed in the National Bank of Georgia, family member receiving subsistence allowance);
· Gambling advertising was banned, with certain exceptions.

As for the tax changes – they are discussed below.

Reasons for refusal of permit

The permit will not be issued if:

· the application submitted by the permit seeker and the attached documents do not meet the requirements of the law and were not corrected by the permit seeker within the deadline set by the administrative body;
· the permit seeker cannot meet the permit conditions established by the law or by the representative body of the municipality on the basis of the law;
· the director / owner / ultimate beneficial owner is convicted or has a conviction record of an intentional economic crime, including an offense in the field of financial activity, or intentional serious or particularly serious crime, and his conviction has not been revoked or quashed;
· the company has an active tax debt.

The Government of Georgia is authorized to establish additional conditions for permit seeker for the issuance of permit. Permit seeker / permit holder is required to comply with these conditions. Their non-compliance is considered a violation of the permit conditions.

Taxation of gambling business in Georgia

Tax code of Georgia fully exempt from corporate income tax distribution of profit earned by persons from organizing:

- a gambling club,
- a slot machine saloon,
- a betting house.

This does not apply for the profit earned by them from organising games in a systemic-electronic form (online). In this case 10% corporate income tax applies on GGR (difference between the bets received by the company and winning amounts transferred to the players.

Companies, that are organizing live streaming studios (without taking bets from players) are subject to regular 15% corporate tax.

Also, there is 5% dividend tax, that applies on any regular Georgian company, including gambling business. However the person still might be exempt from this tax on the basis of double tax treaty.

Provision of services with lotteries, gambling and games of chance is exempt from VAT.

At the same time such facilities are obliged to withhold personal income tax of the person who won in games.

If you want to obtain any permits and licenses in Georgia, our qualified team is ready to assist you. Contact us today.

DISCLAIMER: This is not a legal, tax or investment advice. Our opinion is not binding for any court or tax authorities. Any kind of investment bears risks.