Casino Business in Georgia: Challenges and Opportunities Discussed at Batumi Gaming Fest
On September 12, the panel discussion "Casino Business in Georgia – Challenges and Opportunities" took place at the Batumi Gaming Fest, bringing together industry experts to discuss the key hurdles and potential growth areas for Georgia’s casino sector. The discussion highlighted the complexities brought on by new regulations, taxation policies, and the evolving business environment in the country. A particular focus was on the impact of recent changes, including a 5% tax on winnings and the restrictions on advertising, which continue to shape the operational landscape for casino operators.
One of the central figures in the discussion was John Harrak, Director of VIP & Business Development and Executive Board Member of Storm International, which manages Shangri La casino in Georgia. Speaking from experience, Harrak emphasized the critical challenge posed by the 5% tax on player winnings, particularly in regard to attracting high-rollers. He noted, “Big players don’t want to pay taxes on their winnings, and this is pushing them to other markets like Cyprus, where such taxes don’t exist. We’ve seen a clear decline in foreign player visits, particularly in Batumi, which heavily relies on tourism and casino-driven revenue.”
Harrak’s comments reflect the difficulties faced by Shangri La casino under these new regulations, which were confirmed by other land-based casinos in Georgia. The panel also explored the wider implications of these rules on the Batumi economy, where the casino industry plays a significant role. The participants agreed that while responsible gaming and taxation are essential, policies must ensure the long-term viability of the casino business. Otherwise, as Harrak pointed out, Georgia risks losing its competitive edge to other destinations that offer more favorable conditions for both operators and players.
Although Darren Keane, CEO of Storm International, was unable to attend the event, he shared his concerns on the matter in a statement: “The casino industry in Georgia has always been an important part of the tourism and entertainment sector, especially in regions like Batumi. However, the new taxation rules present a significant obstacle for growth. It’s crucial that we find a balance between regulation and maintaining the country’s appeal as a prime destination for both local and international players.”
The overall sentiment of the panel was clear: Georgia’s casino industry is at a critical juncture. The current regulations, if not revised or balanced, could lead to a decline in the industry, affecting not just the casinos but the wider economy of regions like Batumi that depend on tourism and related services. The discussion ended on a hopeful note, with the panelists calling for continued dialogue with the government to find solutions that ensure the growth and sustainability of the casino business in Georgia.
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On September 12, the panel discussion "Casino Business in Georgia – Challenges and Opportunities" took place at the Batumi Gaming Fest, bringing together industry experts to discuss the key hurdles and potential growth areas for Georgia’s casino sector. The discussion highlighted the complexities brought on by new regulations, taxation policies, and the evolving business environment in the country. A particular focus was on the impact of recent changes, including a 5% tax on winnings and the restrictions on advertising, which continue to shape the operational landscape for casino operators.
On September 23, Shangri La Casino in Batumi was officially closed following irreconcilable differences between the partners of the casino. Storm International, with over 30 years of expertise in managing premium casinos, made this decision to protect the integrity and reputation of the Shangri La brand.
Darren Keane, CEO of Storm International, will participate in the panel discussion "Casino Business in Georgia – Challenges and Opportunities" at the Batumi Gaming Fest. This prominent event, scheduled for September 12, focuses on land-based and online casino operations, bringing together regional and international professionals, market participants, and lawmakers to share experiences and forge new partnerships.
Keane emphasized the importance of discussing current legislation affecting foreign players. "It is crucial for us to speak at the conference because the new taxation on foreign players may deter them from visiting Georgia. Instead, they might choose destinations like Cyprus and Armenia, where there are no such taxes on winnings. A decline in foreign visitors could result in casino closures, increased unemployment, and a significant reduction in tax revenues for both federal and regional governments," Keane stated.
The Batumi Gaming Fest promises to be a vital forum for discussing the future of the casino industry in Georgia amidst evolving regulatory landscapes.
Navigating the Casino Landscape in Georgia: Insights from the Tbilisi Gaming Festival
The Tbilisi Gaming Festival held on September 15-16, 2023, brought together industry experts and casino operators to discuss the ever-evolving landscape of land-based casinos in Georgia. Among the discussions, the panel focused on "Land-Based Casino Operators in Georgia – Opportunities and Challenges of the Growing Market." John Harrak, Director VIP & Player Development, Executive Board Member of Storm International - a prominent figure in the industry, shared valuable insights on several key topics.
Adapting to Post-Pandemic Trends and opportunities, challenges within the growing market in Georgia
John began by addressing the market trends in Tbilisi, noting that the casino industry was gradually recovering from the pandemic's impact. While Tbilisi and Batumi represent distinct markets, he highlighted Tbilisi's appeal as the capital city, offering a range of attractions for players and their families. With a majority of players being foreigners, Tbilisi's summer season remained vibrant, dispelling concerns about seasonal fluctuations.
Regarding the state of the casino business in Georgia, John Harrak emphasized that it was not in a developmental phase but a fully developed industry. New casinos continually enter the market, but they do so within an already mature sector. He stressed the importance of maintaining high service standards and adapting to evolving customer needs to thrive in this competitive environment.
Navigating Prohibited Advertising
A major challenge facing land-based casinos in Georgia is the prohibition of advertising, which aims to protect the local market. However, John explained that more than 90% of their visitors are foreigners, and the goal is not to attract Georgian players. The advertising restrictions primarily affect online casinos, creating a challenge for land-based operators. Despite these challenges, John emphasized the necessity of advertising to ensure a steady influx of customers.
Coexistence and Cooperation
“All the players that are coming to Batumi are already spoiled. Most of them went to Cyprus and Cyprus has very few government regulations. In general, Batumi has great operators with even greater service levels. They understand what they can do to make sure the business is safe. They protect and look out for their customers.”- John highlighted the unique dynamic and collaborative spirit among casino operators in Georgia.
Maintaining a Skilled Workforce
Addressing the issue of retaining staff, John noted that the casino business is typically favored by younger individuals. In Tbilisi, where there is an established casino presence, attracting and retaining staff is somewhat easier. Shangri La, for instance, runs training schools to nurture young talents and offers them opportunities for career advancement. The focus is not solely on monetary incentives but on providing a pathway to a promising future. This approach helps mitigate the challenges of staff turnover.
Supporting the Government and Industry
John emphasized the importance of collaboration between the government and the casino industry. Casinos have actively supported government initiatives, recognizing the mutual benefits of a thriving tourism and entertainment sector. This collaborative spirit has been particularly crucial during the pandemic, highlighting the intertwined interests of both parties.
In conclusion, the panel discussion shed light on the intricacies of operating land-based casinos in Georgia. Despite challenges such as advertising restrictions and staff retention, the industry continues to grow and adapt. The harmonious coexistence of operators and their support for government initiatives bode well for the future of the casino industry in Georgia.
It's been a busy week! Shangri La Tsakhadzor hosted Russian Poker Tour from 3rd to 13th of February 2023.
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On December the 5th the first legal casino in the city - Shangri La opened in Kharkiv. The international casino is located in the five-star Kharkiv Palace hotel in the very center of the city. Before the opening of the casino, representatives of Storm International held a press conference for journalists and the public.
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Shangri La Casino and Sportsbook is excited to announce our Online Affiliate and Partnership opportunity.
Lavrenty Gubin, Marketing and PR Director of the company took part in the event as a speaker.