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Journal number 3 ∘ Besik Bolkvadze

Expanded Summary 

Doi: 10.36172/EKONOMISTI.2022.XVIII.03.Besik.Bolkvadze

The gambling business is a specific segment of the business sector of the country and the economy in general, towards which there is an ambivalent attitude. In particular, the gambling business creates a certain added value in the economy and, at the same time, it is believed that its functioning is always associated with certain social losses. Also, the attitudes of different groups of the society towards the mentioned business are different, in particular, governmental and business circles are more positive towards the gambling business than the general population, however, this approach differs from country to country.

In order to identify the role and importance of the gambling business as a specific segment of the business sector in the socio-economic development of the country, it is necessary to systematically understand and analyze all the positive and negative impacts of the gambling business on the economic system of different countries. In this regard, two main groups of impact are distinguished, namely, "economic benefits" and "social losses". In this regard, the positive effects can be attributed to the following: General-economic, investment, fiscal, social, tourism promotional and chain (multiplier) effects; The following are some of the negative effects: Human gambling addiction (ludomania), alienation of persons, increase of health expenses, accumulation of debts, involvement of vulnerable groups, increase of crime level, provocation of family problems, money laundering, suicide and others.

Georgian legislation separates the four main areas of the gambling business: Lottery, gambling, winning games and delivery of gambling and/or winning games. The Ministry of Finance of Georgia, with its structural subdivisions, such as the Gambling Business Policy Directorate and the Legal Entity of Public Law – Revenue Service, implements the state policy in the field of gambling business in the country The gambling business, as a business sub-sector, is lobbied by the Georgian Gambling Business Association and the Association of Casinos in Adjara.

Note that the taxation (in terms of fees) of the gambling business in Georgia is mainly based on a fixed method of payment based on quantitative units, which is considered to be a simple method in terms of administration, unlike in many countries of the world, where, in the conditions of proper tax management, gambling business operators are also set fair rates, which at the same time can be differentiated.

According to the data of 2019, the fee for the gambling business was applied to the budgets of a total of 24 self-governing units and the capital of the country, which amounted to a total of 128.4 million GEL. In terms of the fiscal contribution of this fee (ratio to fee income), self-governing units can be conditionally ranked into three parts: Active (> 5%), neutral (1-5%) and passive (<1%) municipal units. "Active" gambling segment includes: Kazbegi (22.8%), Batumi (18.0%), Khelvachauri (13.5%), Chiatura (6.96%), Tbilisi (6.38%) Marneuli (6.32%), Akhalkalaki (5.52%) and  Samtredia (5.32%). Relatively average (neutral) fiscal indicators are typical for the following municipalities: Borjomi (4.65%), Tskaltubo (4.25%), Telavi (4.10%), Sachkhere (3.32%), Kutaisi (2.56 ) And Rustavi (2.31%). This can be explained, on a case-by-case basis, by the relatively high tourism potential of these municipalities, gambling-related benefits, border location, as well as by "binding" online games to the real facilities in municipalities exempted from paying the permit fee. As for the self-governing units with low gambling activity, they include: Kobuleti (0.23%), Ozurgeti (0.29%), Gori (0.49%), Poti (0.50%), Akhaltsikhe (0.51%), Gurjaani (0.56%), Zugdidi (0.80 %), Lagodekhi (0.83%), Sighnaghi (0.84%) and Ninotsminda (0.94%), for most of which, despite a number of permit benefits, their gambling "good action coefficient" is low.

As the analysis of the economic parameters of the gambling business shows, the gambling business in Georgia is indeed one of the growing segments of the business sector, but at the same time, as the analysis shows, its role and economic "benefits" are often overestimated. Therefore, gambling is a generally delicate issue, it is necessary for the state to have a clear policy and proper regulatory approaches to this segment, which will make clear the long-term stable vision of the state in relation to the gambling industry, with the need to maximize the protection and consideration of the best interests of the state and society (including the social capital of the country).

Keywords: Gambling Games, Gambling Business, Gambling Industry.