Quarantine the pause in the legislative process in Ukraine, the end, and now again there are calls to immediately approve the bill on legalization of gambling. Which, by the way, after the first reading has received more than 3.5 thousand corrections and comments. However, they voiced the statement that this bill, when enacted, will destroy the “bandit scheme” of the gambling industry in Ukraine, and active links appear in “large and extremely effective Georgian reforms” on the matter.
Let’s analyze what was, what was promised and what really happened in the gambling industry of Georgia.
Gambling in Georgia was legalized more than fifteen years ago. During the leadership of the most known in Ukraine of the President of Georgia, when the market was “fully liberalised”. The Georgian authorities swore up and down that the most favored for gambling (especially casinos, slot machines and betting) aims to substantially fill the budget of the country and to attract tourists. Nothing like?
But it happened as intended?
Back to ten years ago. Over Georgia was encircled with a rainbow of praises: the country took off in terms of accessibility of doing business with the tail of the list in eleventh place in the world, Forbes magazine designated Georgia the most liberal tax regime in Europe, the American Agency USAID has called the changes taking place in the country “broadest and deepest” of those that were held anywhere in the world over the last fifty years. The American magazine Time also not stingy with compliments, noting that the Georgian resort city of Batumi is developing with such speed that would make steam even China.
What kind of industry in which become so easy to conduct business, which owns six of the ten companies with the highest cash turnover and that for example, in 2018 carried out the turnover of funds in the amount of 6.27 billion US dollars (for comparison — in 2009 it was 42 million US dollars)? If to compare the given number with the value of Georgia’s GDP in the same year 2018, which was 17.6 billion US dollars, it turns out that the turnover of the industry is comparable to 35.6% of GDP of Georgia. What it is: power generation, construction, and maybe high tech it industry?
No, it is a gambling industry. The fruitful consequences of a decade of “liberal” gambling market, isn’t it? Why, then, the opinion polls say that over 60% of Georgian citizens consider it necessary to reintroduce the prohibition of gambling business in Georgia?
Moreover, we will put a simple question: how much money are actually Georgia receives from the gaming industry? What could be more eloquent than statistics? Despite promises to fill the Georgian budget due to the “igralci”, the then Georgian government has a strange way established a tax of turnover of the gambling business, which the world has ever seen: less than 1%. This means that the turnover of 6.27 billion US dollars in 2018, the state budget received taxes about 62 million US dollars. This is 1.4% of all tax revenues. Recall that from the industry, the turnover of which is estimated at an amount greater than one-third of Georgia’s GDP.
For comparison: in the United States GGR (Gross Gaming Revenue — the player’s bet minus winnings i.e. income) 20% plus an additional 25 per cent tax on profits in Finland — 10% of GGR plus a profit tax of 30%, in Austria from 35 to 80% of GGR, in Luxembourg from 10 to 80% of GGR, GGR in Australia — 62,5%, in Singapore — 15% of GGR, and so on.
Given the above, it is not surprising that now Ukraine is strongly proposed not to impose taxes on gambling, and to borrow money only for a license to supposedly “advance” to fill the budget and “not to worry” by paying taxes? New amount of promises for the license — “as many as” five hundred millions of dollars. However, the next day the number had fallen to two hundred and thirty million…
Well known is the fact that the state to earn the gaming license is necessary to encourage operators to take charge as quickly as possible by offering games with high risk and involvement in the game more players, not shrinking, primarily children.
In addition, it will mean that the powerful gambling lobby, which is now so influential, that does not allow you to write and make public, not protectionist for certain kinds of games, gambling law, after the legalization of “gambling hell” will put pressure on all involved in the first place, the regulator, demanding an even greater “liberalisation”, first and foremost, a permanent reduction of the level of royalties.
There is another factor that proves that talk about making on the license — phantom net. We are told that fixed assets are obtained through licenses. At the same time, the draft law stipulates the norms, according to which, the one who will build a hotel of three hundred rooms, will be granted full exemption from the payment of licensing fees. Obviously, it will not increase revenues. But, it is the same rules that now operate in Georgia, where the construction of the resort casino hotel, a hundred rooms exempt from payment of license for ten years, and for operators who will open a casino hotel in remote areas, the license is even free.
If we’re talking about adopted throughout the civilized world the “principles of responsible gaming”, then we should stay on the inadmissibility of the introduction of play areas in “blind corners” sauce “will give work to local population.” It is no secret that the main risk group that can become dependent on gambling, employees of gambling establishments and their loved ones. In civilized countries, special attention is paid to minimizing gambling activity in rural areas, because such sociodemographic factors as poverty and unemployment make the local population an easy prey for the game. Statistics suggests that the social accessibility of gambling in rural areas are:
In addition, in a situation of social exclusion in connection with the quarantine, and this condition may continue for who knows how long — all these factors become extremely relevant and should be taken into account before you go on the run in pursuit of a mythical earnings of the state on the excitement of the citizens.
And one more thing. In the context of Georgian reforms often have to hear about Batumi. And what attracted investors to the city, why they flew in there like bees to honey? Anyone who’s been there, surprised casino at every step. But otherwise, if the cost of a license to open a casino in Batumi is twenty times smaller than the opening of the casino in Tbilisi (85 thousand dollars against $ 1.7 million)? In 2012, the BBC called Batumi “black Las Vegas” for Turkish citizens. In fact, 70% of tourists in Batumi from Turkey (where there is a ban on “igralka”), and over the many towering hotels Turkish flags.
Anyone who believes in fables about “gambling Paradise” in Georgia, let him wonder why for over a decade, the Patriarch of Georgia requests to limit the gambling industry. Why the vast majority of Georgia residents again demand to ban gambling? Moreover, the same is required of residents of Georgia’s regions neighboring Turkey. Because Turkish women are very often terminated phones at the Consulate of Turkey in Batumi in search of their men who spend all weekend prosazhivaya family budget, in Batumi casino.
Now imagine the reaction of our Western neighbors, when the Ukrainian casino will open in the border regions and the drain of the Czech, Polish, Hungarian families money on uncontrolled gambling.
What kind of investment in the economy can say, if we often hear about the usual practice, when the monopoly of the gambling market of Georgia placed all substantive personnel bookmakers and analysts outside the country, and in Georgia there are only offices of the screen, where sit the marketers and accountants who have no influence? Despite the assurances of the Georgian authorities about control of the market, 59% of students — children aged 15 to 18 years admit that they constantly gamble. Georgian “center for the study of gambling and gambling” States that advertising of gambling is regularly placed near schools. At the same time, the law prohibits gambling for children.
It is significant that according to statistics, three thousand serving sentences in Georgia, nearly a third have committed crimes related to gambling.
The danger of uncontrolled gambling industry lies in the possible fatal consequences for the players. The Georgian organization “Mothers against gaming” without a hint declares that “gambling is built on unhappiness and suicide”. In 2019, seventeen young people in Georgia had brought upon themselves death because of gambling and seventeen people tried to commit suicide. Public television of Georgia has banned the advertising of gambling after the suicide of his 29-year employee for reasons related to gambling. Sobering and age of the suicide in Georgia that starts with fourteen years.
In Georgia with a population of 3 million 700 thousand people, there are 700 thousand gamers, and a third of the 300 thousands of people lost their homes, were evicted because of debts arising from gambling.
Which means all of the above? In our opinion, in Georgia there is no effective mechanism of control over gambling by the state. During operation of gambling operators, under the aggressive recruiting new players and turning them into gamers or movement of money. Anywhere. And inability to control the gambling industry leads to severe mental disorders in a game, throwing him out of society, it destroys family life, destroys the financial well-being.
After all, no wonder the world health organization has made gambling to the list of mental illnesses along with addiction, but with a higher level of risk to health and human life.
That is why all the stories about what Ukraine should learn from the Georgian experience in the legalization of gambling, it attempts to impose on us anti-state, anti-social approach is very vulnerable to companies the question is the promotion of chaos within the whole country.
We need a law on the regulation of gambling. The law of quality, taking into account the world, both positive and negative, experience. I hope that this will be written and adopted. And hope that the person that put pressure on all the brakes, trying also from the Ukrainians to make a nation of gamers, will disappear without having achieved anything.