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Casino Fees Put Industry in a Crunch

In Georgia – not the state in the US, but rather the country situated between the Greater Caucasus and the Lesser Caucasus – heavy taxes are being put on the various casinos operating in Tbilisi, Batumi, and Tskaltubo. On January 1st, 2006, most of the casino sites in Tbilisi stopped operation after a new law was passed regarding elevated licensing fees on gambling businesses and casinos. Now, under the new law, opening a casino in Tbilisi requires that owners pay a fee of GEL 5 million a year, a price that is simply to high for many casino owners to pay.

‘First we will start to systemize the country’s casinos. The casinos that will be opened in Tbilisi will be good, big casinos, with enough playing tables to satisfy the highest standards,’ Lasha Gotsiridze, the deputy Finance Minister, told Rustavi-2. In the city of Batumi, only GEL 1 million will be required for payment, and in Tskaltubo, casino owners will not have to pay taxes whatsoever. These two cities were given privileged status in order to promote tourism.

Some casino owners have voiced their disagreement with the method the country is taking in order to ‘clean up’ the area from its multitude of casinos. They understand the need, but not the process. The government’s goal is to avoid a monopoly of casinos without limiting them – and this will be accomplished by charging such high taxes. The results of this new law remain to be seen, but with the amount of disapproval among casino owners growing daily, it is not clear whether the goal set out by the government will be attained.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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