The Government of Georgia recently submitted a legislative package to the Parliament of Georgia with the aim of implementing new regulations for the organization of gambling and winning games through an online format. The legislative package encompasses amendments to various legislative acts, including but not limited to the following acts: The Law of Georgia on Lotteries, Gambling and Winning Games (the Law on Gambling), the Law of Georgia on Licenses and Permits, the Law of Georgia on License and Permit Fees, and the Law of Georgia on Gambling Business Fees (the Legislative Package). The proposed amendments seek to introduce a separate permit system, enabling effective control and oversight of the industry.

The Legislative Package underwent an accelerated parliamentary process, with the first and second hearings held in December 2022. Subsequently, on 10 February 2023, the final hearing took place, and the package was sent to the President of Georgia for signature and publication.

Defining Systemic-Electronic Games and Persons Affected
The Legislative Package introduced a novel definition for “organizing gambling and/or winning games in a systemic-electronic form.” This definition covers games conducted through the internet, telephone, and specially designed electronic platforms. The Legislative Package also includes provisions regarding “Persons Addicted to Gambling” and “Restricted Persons,” explicitly considering those addicted to systemic-electronic games as well.

Permit Requirements and Restrictions
Under the amendments, obtaining permits for organizing systemic-electronic gambling is mandatory. Separate permits are required for organizing casinos, totalizators, and slot saloons in a systemic-electronic form. The Legislative Package states that a permit for a systemic-electronic casino can be issued either with or without an existing permit for a land-based casino, and the same applies to slot saloons and totalizators, thus, a permit for slot saloons and a permit for totalizators can be issued either with or without an existing permit for a land-based slot saloon and an existing permit for a land-based totalizator. Additionally, the Legislative Package specifies that each permit for a slot saloon, totalizator, or casino can only cover a single website under a unique internet domain.

Restrictions on Land-Based Establishments
To comply with the new regulations, land-based gambling establishments, such as slot saloons and casinos, are prohibited from hosting computers or electronic devices for participation in systemic-electronic games. This provision aims to emphasize the requirement for a separate permit for systemic-electronic games.

Fines and Fees
The Legislative Package outlined the fines imposed for violations related to the permits for the gambling games in a systemic-electronic form. Persons found in violation of permit requirements under the Law on Gambling face a fine of GEL7,000, while those failing to meet permit fee deadlines may be fined GEL20,000. The Legislative Package also introduced annual fees and quarterly gambling business fees, varying based on the type of game and whether the person already holds permit for land-based gambling game. In particular, the Legislative Package established following annual fees:

(1) permit for organizing casino in a systemic-electronic form – GEL5,000,000;
(2) permit for organizing casino in a systemic-electronic form on the basis of the permit for organizing casino (land based) – GEL100,000;
(3) permit for organizing slot saloon in a systemic-electronic form – GEL1,000,000;
(4) permit for organizing slot saloon in a systemic-electronic form on the basis of the permit for organizing slot saloon (land based) – GEL100,000; and
(5) permit for organizing totalizator in a systemic-electronic form – GEL100,000.

Effective Date and Compliance
The proposed amendments will come into force on 1 June 2024. Thus, entities involved in systemic-electronic games must ensure compliance with the new regulatory framework before 1 June 2024. The Legislative Package further mandated the Government and Ministry of Finance of Georgia, and local municipalities to develop subordinate legislative packages related to the amendments by the same date.

The Legislative Package represents a significant step towards regulating online gaming activities in the country. By implementing a separate permit system, the Government of Georgia aims to exercise effective control over the industry. As the Legislative Package has already been approved, industry participants must prepare for compliance with the new regulations by June 2024.

By MG Law Office