Gambling in Georgia, Kazakhstan, Belarus: investment climate analysis

While Russia is closing Azov-City and organizes new gaming zones, and Ukraine is thinking about gambling legalizing, gambling in neighboring countries is actively moving forward. The pace is sometimes slower and sometimes faster, but there’s movement anyway.

Having thoroughly analyzed the market, Smile-Expо defined three countries with a favorable investment climate -- Georgia, Kazakhstan and Belarus. Following Moscow, Belarus and Georgia hosted a successful international gambling and entertainment exhibition-forum. This year, Smile-Expо is planning to organize an event in Kazakhstan. In this article, we’ll tell you why Georgia, Kazakhstan and Belarus shall be considered reliable countries for gambling investment.

 

Georgia

 

The history of Georgian gambling business began far away in the Soviet times, but it was only after the country became independent that the industry started from scratch. Casinos started popping up all over the state, and that was the time when there was not even a hint for legislation to regulate the segment.

 

Serious efforts to limit gambling have been made in the beginning of a new millennium. When Mikhail Saakashvili left his presidency, the new government ordered to ban or limit gambling business. But as the time passed, it all became vice versa – Georgia began to update gambling business and continues to do so nowadays.

 

 

 

Since 2004, the country has had radical political reforms, allowing to completely destroy corruption and criminal activities. This gave positive results allowing Georgia to become third in GALLUP’s most safe countries of the world list.

 

As the law permits gambling in any of its forms, this helps to develop an industry in the country, improving tourism. In 2012, more than 4 m people visited the state – it’s about the same number as Georgia’s total population. In particular, online segment is on the rise, involving about 60-70 thousand players (mostly foreigners). For comparison: land-based venues attract 500-1000 people.

 

Government understands that Georgia is a perfect country for tourism. It’s important to make the use of the fact that gambling is banned in the neighboring countries.

 

Key factors for investment interest are low corruption, flexible and transparent taxation system, solid market capacity, favorable climate for entrepreneurs.

 

According to Transparency International, Georgia left behind a lot of states in matters of bribery crackdown. Experts of the World Bank define it as the country with favorable business climate, placing Georgian economy on the 15th place.

 

Another key advantage of Georgia is a low overregulation level, because one can register a company is one day. Taxes are collected online, there’s no need to see a tax inspector.

 

Georgia is a state with clear and transparent tax politics, where everyone understands what and how he should pay for. Forbes placed Georgia fourth among five states with low tax workload. Besides, Georgia has no social, benefit, and inheritance tax.

 

Government helps investors of gambling market, giving them benefits in wide range of market incentives, taking into account region, location, and the year of venue construction.

 

Georgia attracts people for its exotic culture, amazing landscapes, fine cuisine and wine. This is another reason for being really great place to operate a gambling business.

 

Kazakhstan

 

The country permits various forms of gambling, including casinos, slot halls, betting shops and pari-mutuel.

 

Although, casinos have to be located in one of two zones – Almaty region or Akmola region.

 

Many experts say that gambling in Kazakhstan is not developed and has its aspects. When Russia banned casinos, many people transferred to neighboring countries with no such limitations.

 

 

 

This decision has spurred illegal gambling houses with annual turnover of $300 m in 2012 alone. And this is despite the fact that law-enforcement authorities close dozens of such gambling venues. Nevertheless, gamblers still waste big money in illegal casinos.

 

Kazakhstan gambling market faced some problems in the last years: administrative pressure, high price for entrance ticket, long ROI period.

 

But there’s light in the end of the tunnel.

 

It’s been kept by online games which can give Kazakhstan benefits by taking it into another level.

 

In 2012, annual gambling turnover has been estimated as $80-100 m. As of today, most of it can be referred to Ukrainian and Russian companies and the number of local players is small.

 

Prospect online casino players know not much of the industry and Kazakh businessman hold off on investing their money in untrusted online projects development.

 

Nevertheless, given the right approach, Kazakhstan gambling has a promising future. Recent Nation Master’s rating listed the country 94th among the states with the highest net income. Average citizen’s income comprises 614 dollars.

 

Economics Senate committee has recently reviewed a bill “On amendments to certain legislative acts of Republic of Kazakhstan regarding the gambling business”.

 

The bill aims to improve gambling legislation and remove all the flaws, as well as securing the ban on online segment, improving the control of bookmaking and pari-mutuel operation.

 

In particular, it defines that taxation values of cashiers, betting shops and pari-mutuel will grow. The bill extends amendments in the attachments “On advertising” and “On gambling business”.

 

Besides, it regulates keeping of gambling equipment, bans location of gaming venues, pari-mutuel and betting shops in residential buildings.

 

 

Belarus

 

 

Gambling in Belarus has started to flourish in 2009, when the neighboring Russia banned gambling and players has to find a new place.

The advantage of Belarus is that it is the only market on the territory of the former Soviet Union where gambling business is not banned.

 

Belarus is loyal towards such locations and initiations of criminal cases against gamblers happen quite rarely.

 

Today, about a thousand companies are being involved into gambling on the Belarus territory. Minsk has about 30 casinos, 6 more are in Brest, other cities have venues as well. In general, more than half of populated localities have their gaming houses, first of which has opened back in 1992.

Today, the state can not boast serious income from this segment, because not even 1 per cent of this money goes into the budget. Nonetheless, government hopes that this can be changed by integration of online monitoring systems.

 

The government has to understand that casino is a golden mine, requiring a decent infrastructure, otherwise it will lure away to other markets, for example, to Sochi and Crimea zones, which are now under construction.

 

In the same time, Belarus is a state where economy is developing dynamically, unemployment level is low, infrastructure is good, and benefits are active, distinguishing the country from other foreign partners.

 

Moreover, Belarus has favorable investment and taxation climate.

Some measures of economic policy are being applied, aiming to reduce negative crisis consequences of 2011. These measures reduced imbalance significantly and secured a background for further economic development.

 

You can learn more about future gambling prospects of these countries and how to earn on gambling business in Georgia, Kazakhstan and Belarus firsthand at RGW 2015.

Leading industry experts are preparing the hottest information and interesting numbers, which they will demonstrate in their presentations on 3-4 of June, in ECC Sokolniki, Moscow.

 

Join to the international gambling and entertainment exhibition-forum RGW-2015!