Slot Clubs are supposed to be abolished
17 February, 2011
Slot Clubs are supposed to be abolished

To get rid the country of slot clubs and establish better control over gambling business, Georgian government abolishes licenses on running gambling machine salons and integrates it with the casino license. A bill on integration of slot cub licenses with the casino is under vision at the moment and will be introduced to parliament soon. The purpose of the bills is to cut down the number of slot clubs that encounter on every step in Georgian cities and move them

into casinos.
By this move the government plans to institute better regulation over the gambling machine business, which is notorious for criminal bets that end up by gang-style showdowns and fights as well as the elusion from taxes. Revenue Service of the Ministry of Finances of Georgia (MOF) imposed GEL 53 million penalty on totalizator salons for tax elusion in November of 2010 [136 totalizators eluded GEL 230 million totally]. In December of 2010 the revenue service found out that customers lost about GEL 110 million in 2009-2010 in 340 lot clubs but they tried to show only 15% of real incomes. They were swindling, deceiving clients, and violating license requirements that frequently led to criminal outcomes, officials say.
Now governmental understanding is that by integrating slot clubs with casinos they will be able to impose better regulation over gambling business as far as casino license terms are much stronger.
“In many countries gambling machine salons [slot clubs] are regulated together with casinos and we chose European model. When checking 135 salons we discovered a lot of infringements, profit figure was disputable, license demands violated and total tax-elusion was a matter of fact. This is one of the most risky businesses from this point of view and we decided to move them to casinos that is much better regulated and besides the business will get bigger,” Goga Tskhakaia, Head of Revenue Service, told Georgian Journal.
The fiscal effect is supposed not to diminish by abolishing slot clubs. Based on GHN news, the entire income taken from slot clubs licenses made GEL 5.4 million in 2010. On the other hand,  casino license alone totals GEL 5 million throughout Georgia except tourist haunts including Batumi, Kobuleti, Bazaleti Lake adjacent territory, and Borjomi where casino license is preferential – GEL 250 thousand. Moreover Signagi and Tskaltubo [spa-resort] are exempted from casino license toll.
These preferences were introduced in 2005 to discharge Tbilisi from casinos and trigger economic development in potential tourist haunts and health-resorts. There were about 20 casinos in Tbilisi alone by 2005 as the license toll totaled to GEL 20 thousand – the amount is fixed for slot club license by today. Government decided to allow grand casinos alone and to discourage petty fry they increased license toll by 250 fold. As a result only 8 casinos operate across Georgia at the moment – two in Tbilisi, three in Batumi, two in Tskaltubo, and one in Signagi.  
However as the tourism development became one of the key priorities to government it became more benevolent to casinos. They consider casino as a part of tourism now. Economic analysts say Georgia has favorable potential for developing this business in the region as far as in neighboring countries including Azerbaijan and Turkey casinos are forbidden.  There are plenty of casinos in Armenia but due to political reasons neither Azeri nor Turkish tourists are supposed to go to Armenia. And Georgia having befriended all regional countries seems ideal to this end. According to tourism department of economic ministry, about 80% of Turkish tourists enjoy casino during their visits in Georgia.
To boost tourism through casino in 2010 Georgian government exempted casinos operating at hotels with more than 100 rooms at Black Sea littoral of Georgia from license for 10 years. Abolishment of slot clubs separately to casino also seems as additional incentive to the latter. Today if a casino installs gambling machines it needs two separate licenses: one for casino business, and the other - for slot clubs totaling to GEL 20 thousand in Tbilisi, Rustavi, Kutaisi, Batumi, and Poti, the remainder territory of the country pays GEL 12 thousand. Once the slot club license will be integrated with that of  casino, owners of this business will pay only for casino license. 


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