Georgia has unveiled draft legislation that would introduce a new licensing category for international online gambling operators.
Submitted to parliament under an accelerated legislative process, the proposed amendments to the law “On the Organisation of Lotteries, Gambling and Profitable Games” would establish dedicated licences for operators offering online slots and sports betting exclusively to foreign customers.
Under the proposals, only foreign citizens and stateless persons would be permitted to access these platforms, with Georgian citizens automatically blocked from the websites.
The draft legislation also introduces a more favourable tax regime for internationally focused operators – a tactic deployed in the jurisdictions of Malta, Gibraltar and, more recently, Estonia.
Rather than the standard 20% gross gaming revenue (GGR) tax applied to online casinos serving Georgian customers, operators licensed under the new framework would pay a reduced 5% GGR tax, calculated on the difference between stakes received and winnings paid out.
Each international licence would be valid for five years, with an annual fee of 100,000 GEL (£28,740). Operators failing to meet licence conditions or payment deadlines would face fines of 20,000 GEL.
The reforms would also tighten domain restrictions by limiting operators to a single website per licence, compared with the current allowance of two websites.
Georgia to follow footsteps of Europe’s gambling hubs?
Other areas across Europe, notably the aforementioned Malta, Gibraltar, as well as the Isle of Man have all been the beneficiaries of thriving iGaming businesses setting up base there due to favourable taxes.
Estonia, more recently, has emerged as another European contender looking to build up a cluster of iGaming companies, announcing that it will drop its tax on GGR to 4% by 2029.
This process, however, has stuttered almost from the off, with license applications being withdrawn and clerical errors just a couple of the problems the country’s policymakers have faced.
Georgia’s proposition is unique in the fact that it is offering a cut-price GGR tax to foreign citizens however, with, as mentioned above, Georgia-facing operators still facing the standard 20% taxation rate.
However, this low tax rate for businesses serving foreign citizens could entice companies to expand in the country.
The country’s government has been strict on the industry, having excluded around 1.5 million of its citizens from gambling.
But the likes of Flutter Entertainment-owned Adjarabet and Betsson Georgia (formerly europebet) are still big players in the country, showing that there is still already an existing appetite for the industry in Georgia.
According to the explanatory note accompanying the bill, the reforms are designed to balance consumer protection with economic growth.
Lawmakers argue that restricting access for Georgian citizens while encouraging internationally focused operators will help protect local consumers from gambling-related harm.
They have also stated that it should attract foreign direct investment, create skilled technology and marketing jobs, expand the country’s service sector and generate additional tax revenue.
