TI Georgia’s first research into the gambling market

08 December, 2014

 

In Georgia, gambling is a well-developed industry and a significant contributor towards state budget revenues. Despite this, the market has not been studied to date.

Transparency International (TI) Georgia’s report released today represents the first attempt to collect information about this market. The report covers a review of the legislation regulation this industry in Georgia as well as basic figures of the market: statistics on licenses, revenues, key players and their owners.

Financial indicators

  • The first significant increase in gambling market and its profits was marked in 2011. The industry’s turnover 3.2 times and profits 54 times over the 2010 turnover. The market kept growing in 2012-2013 .

  • In 2013, the turnover of gambling and other gaming companies totalled approximately GEL 1.213 billion while duties collected from permits were over GEL 105.2 million, making up to 1.4% of the 2013 state budget revenues.

2014* includes data only for the first two quarters of the year.

  • Based on our estimates, the market will stop growing and government revenues will decline in 2014: in the first two quarters of 2014 the turnover of gambling and gaming industry was only GEL 338.1 million.

  • In 2013, in total 5 046 people were employed in the industry — 0.3% of employed population. 

Key actors in the market

  • As of 1 October 2014, there are 94 gambling or gaming companies operating in Georgia. This list includes 32 large companies. Most companies are operating in Tbilisi, followed by Batumi and Kutaisi.

  • Owners of some of these large companies have recently appeared on political parties’ donors lists:

  • Teimuraz Ugulava, owner of Geobet LLC and Contrast + LLC, donated GEL 60 000 to the United National Movement (UNM) before the 2012 parliamentary elections.
  • Vladimer Bakuradze, owner of Slot Gldani LLC, Red and Black LLC and EuroCapital LLC, also donated GEL 50 000 to UNM ahead of the 2012 vote.
  • Irakli Khakhubia, owner of Betwin LLC, also appeared on the 2012 UNM donors list with his GEL 10 000 contribution.
  • In May 2013, Levan Chikvaidze, Director of Georgian Lottery Company LLC, donated GEL 20 000 to Georgian Dream. Levan Chikvaidze is also the General Director of Georgian Post LLC.
  • Georgian Lottery Company is the only state-owned gambling company: 70% of its shares are owned by the state through Georgian Post.

  • In six cases it was impossible to identify owners as these companies were registered in foreign states and offshore “tax havens”:

  • Companies registered in foreign states; Georgian Casino Group LLC – Netherlands (75%); Daydream Universal Georgia LLC – United Kingdom (100%);

  • Companies registered in offshore “tax havens”: Monaco LLC – Cyprus (100%); Georgian Lottery Company LLC – British Virgin Islands (30%); Casino Adjara LLC – Cyprus (10%), British Virgin Islands (90%); Lemon 2009 LLC – Malta (100%).

  • Among the owners, we also found citizens of Russian Federation, Turkey, Armenia and the United Kingdom.

TI Georgia plans to continue its research into the gambling industry and publish another report where public opinion poll results on the matter will be presented. Our second report will also include analysis of the best European practices and specific recommendations.