Internet Gambling in Georgia
06 June, 2012

One of the most noticeable things about Tbilisi in the last few years is the increase in advertising for Internet gambling. More than anywhere I have ever seen in the world. The advertisements are everywhere, on marshutkas, busses, giant TV screens, billboards. The industries that engage in a great deal of out door advertising are generally those that are the most profitable. Who could imagine that an industry would appear more profitable than the manufacture and sale of cigarettes?

There have been casinos for twenty years, and there are more now but this is not that noticeable. I hear people say that they are good for tourists, that visitors from Iran and other, particularly Muslim countries like to visit them but they seem to be filled with more Georgians than non-Georgians. Casino's are a very profitable business of course. But they take a great deal of work, they must create an atmosphere that feels luxurious to those who visit, there must be a great deal of training, in order to completely prevent mistakes among the croupiers. But in the end casinos are simply a place where each day a group of people enter with money, hand over a percentage of that money to the casino, and leave. In casinos, no matter what happens the casino always wins. It is a fact of behavioural science that people rarely stop gambling when they win but must stop when they have no more money. You are not going to buy apples until you run out of money. And even if gamblers have the discipline to avoid that trap while gambling, depending on the game, the casino will always take between three and thirty percent of the bets or games depending on which.
The less expensive version of the big tourist casinos are slot machine parlours. They are very profitable. I don't know the percentages in Georgia but generally in the United States, slot machines keep thirty percent of the money put in them. But those places require some cash, but it is a fairly small initial investment and they are heavily taxed. Obviously some people enjoy them but those people are generally not the most educated in society.
By far the greatest amount of advertising is for internet betting and it is the most profitable, mainly because it requires so little work. In the last few years, the software has become very inexpensive to buy and

customise for the Georgian market. There are no physical locations which saves enormous costs. The most complex part is setting up the network of places to sell vouchers to play, but with this amount of advertising, the demand will help create that network.
So who gambles on the internet? Lots of people, but who are those for whom it is a problem? I hear more and more stories of people being addicted to internet gambling. Somebody recently told me that is the second most popular website in Georgia.
There is a great deal of sociological research on this subject of gambling addiction around the world but I don't know of any in Georgia. My feeling is it is among group of people who are largely bored, perhaps unemployed and are gambling with money they are given. Obviously they know how to use the internet but don't seem to have too many other interested, professional or otherwise to occupy their time.
There is a growing body of literature that indicates that people for whom gambling becomes a problem are those also at risk of addiction to chemicals, nicotine, alcohol, opiates and others.
One of the most important roles it plays is as a transfer mechanism of money from from the poor to the rich; simply moving money out of the pockets that most need it.
Does anything need to be done about this? At a time when the government has plenty of plans, they could use that revenue, and it would be good to tax. Certainly casinos and slot machine parlours are heavily taxed, as they should be. Gambling is in ways similar to cigarettes and alcohol; not that useful for society but incredibly high profits. Those industries are usually heavily taxed. I don't know who owns all these internet betting firms but that is an interesting question. Although it must be said that individuals close to the state are in control of most of the outdoor advertising and those people may not  have great incentives to move away from this current revenue generation activity.
And another response would be education. Education about the business model behind internet gambling. The Ministry of Education piles on more and more facts that need to be learned but they may not have much direct connection with the day to day lives of students. As more or more young people's lives are affected by internet gambling directly or indirectly, maybe it should be discussed from a mathematical standpoint. Gambling is legal and a day to day part of the lives of many families, but I have never seen it discussed in any Georgian text book, at least in the way it is practiced in Georgia.

Georgian Version