The former Prime Minister of the Republic of Georgia Bidzina Ivanishvili recently announced that when he met with Turkey’s President Recep Erdogan Tayyp, the President requested him to use his influence and shutdown Georgia’s casinos that operate near the Turkish border.

Turkey and Georgia entered into an agreement in 2012, relaxing border restrictions and made it easy for citizens from both countries to cross the border. The Adjara region is close to Turkey’s northeastern border and its capital city Batumi is a very popular tourist destination and home to a number of casinos. Erdogan Tayyp wants the casinos in this region to be closed as there are reports that the Turkish ambassador in Batumi has been receiving a lot of calls from Turkish wives who want their husbands driven out of the casinos and sent back home.

Forbes rates Bidzina Ivanishvili wealth at $4.8 billion and while the billionaire is a very influential man, he admits that it will be difficult for him to shutdown the casino industry even though he wanted to.  The main reason for this is because the casino industry in Batumi plays a vital role in attracting tourists and generating a significant amount of income for the government.

Ivanishvili stated that he was aware that a number of families were complaining about the casinos, it was impossible to deny that the casinos were also having a positive impact on the economy and tourism. The billionaire believes that maybe the regulations governing the casino industry can be tightened so that some of these concerns are addressed.

Government data shows that only 3 casinos licenses have been issued in the capital of Tbilisi whereas Batumi has 11 casinos licenses. Tbilisi has an annual licensing fee of $216,000 on casinos whereas Batumi charges an annual licensing fee of just $108,000, which can be waived if the casino decides to develop a hotel that has a minimum of 100 rooms. The municipal budget in Batumi obtains around $8.7 million in the form of gambling taxes and fees, out of which 81 percent is generated from the casinos in the region.

However analysts from the Association of young financiers and businessmen in Georgia say that the casino industry in Batumi could be generating a lot more funds, making the casino industry a major part of the country’s economy and difficult to shutdown.

In a statement, Zurab Kukuladze, an analyst from the Association of young financiers and businessmen said “It is very difficult to accurately account for the revenues being generated by each casino as the accounting process is not simple and transparent. The administration is also very complex. Casinos do not pay tax on profit, they are subject to collection. Moreover, an operator can start a casino and launch a number of other services at the resort but will only be held responsible to pay the collection. Therefore it is difficult to predict the exact turnover from
casinos.”

 

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