Georgia Considers International iGaming Licenses to Rival Malta and Curacao

The Georgian Government is setting up a new licensing category, for operators who will target international customers only. This move looks to attract offshore operators, who can use Georgia as a base to serve players in various European and Eurasian markets. Operators with these new licenses will not be allowed to take on Georgian customers, but they can set up their offices in Georgia, supplying jobs, paying favorable domestic taxes, and helping to boost both the economy and Georgia’s international iGaming status.

If successful, Georgia may add some competition to the likes of Curacao, Malta, Gibraltar, and other top tier international iGaming jurisdictions. The conditions would need to be right, and it would definitely take time to build up, but Georgia could be heading towards a massive surge in iGaming infrastructure and industry.

Why Georgia?

The main spots for casino and sportsbook operators to set up offshore sites have usually been Malta, outlying UK territories, Kahnawake, Curacao, and various other smaller countries. There are a few unifying characteristics of countries that operators choose to set up base in. For instance, countries with favorable domestic tax laws – even if the site has to pay “place of consumption” taxes in the market they are targeting – and the country should have a good international standing in the global iGaming industry. These are usually smaller countries or autonomous regions, located in international waters or close to major geographic economic and trading regions.

Georgia, a country bordered with Turkey, Russia, Azerbaijan and Armenia, makes an interesting case for such a jurisdiction. They have trading ties to Europe but due to their location, they could also be a relevant base for operators targeting Eurasian markets. This seems to be the plan for the Georgian Government, and, through the new licensing category for operators who target only international customers, it could be an important step forward for broader iGaming jurisdictions in nearby European and Eurasian markets.

Georgian International Casino Licensing

The goal behind the foreign-facing iGaming licenses is to attract more operators to Georgia, but without disrupting the existing infrastructure for the domestic market. The licenses would cover online casino games, slots, sports betting, and the sites that operate with these iGaming licenses would be banned from targeting Georgian players. The Georgian authorities would set 1 license per brand, to avoid flocks of skin sites and sub-licensees from taking over, and the permit would run for 5 years.

The eye catching part of the deal is that Georgia wants to diverge from the current 20% tax rate (that domestic online casinos must pay), and charge these offshore licensees just 5% on gross gaming revenue. The licensing fee for a domestic market-facing Georgian online casino is GEL 5,000,000 (around $1.89 million), but for this special international license, operators would only need to pay GEL 100,000 (~$37,800).

Who Are Georgia’s Competitors?

Should the proposal make it through into Georgian iGaming laws, then Georgia will be entering a very competitive space. For there are jurisdictions that have regulated this offshore space for over 20 years, and the bar is set high for such territories. It is not solely about who offers the best tax incentives, where the market reach is best, and which operators are most trustworthy – both for gaining access to regions but also for giving the customers the satisfaction that the sites are reliable. No, because there are also issues to deal with such as the rise of verticals such as P2P gaming, virtual sports betting, and skill games. Now, a lot of these offshore casino bases are also building infrastructure to legalize Bitcoin casinos and crypto-native platforms.

Top tier gaming authorities for Georgia to compete against include:

• Malta: A longstanding authority in Europe, recognizing many game suppliers and seen as one of the pioneers in the industry
• Curacao: Targeting players from all over the world, one of the first offshore gambling authorities and has crypto-friendly licensing too
• Gibraltar: In position to target both UK market and European (though more difficult after Brexit). Recently launched prediction market licenses too
• Isle of Man: Mostly targeting UK customers, with favorable tax laws and attracts big brands
• Kahnawake: Based in Canada, mostly focuses on domestic market (where it is not officially recognized) but also recognized in countries abroad
• Anjouan: An emerging iGaming authority that specializes in crypto casinos, with quick approvals and low costs
• Panama: Targeting Latin American markets, but licensees can expand their service globally
• Costa Rica: Many sportsbooks and casinos based here target both North and South American markets. Operators are registered under general business laws, not online gambling licenses
• Estonia: A more direct competitor for Georgia; Estonia has a young iGaming market, it is digitally advanced, and it is quickly attracting big companies

The list could easily go on, as there are jurisdictions virtually all around the world. But the major competitors are Malta and Curacao, which license hundreds of operators. After them, the next authorities have considerably fewer, but even so, they may have big-name licensees in their register, adding further credit and standing in the global iGaming industry.

How Do International Casinos Work

An online casino license is effectively a benchmark to win a player’s trust. It gives you the assurance that the online casino complies with the laws of the regulator, and if you had a dispute with the casino, you can refer to the regulator to resolve this. However, there is a big difference between whether that regulator is authority in your country, or whether it is a country abroad. Most online casinos either set up shop in their local market – such as a UK casino obtaining a UKGC license. Or, they set up shop abroad, where the costs are more favorable, and then they enter the market either by the overseas license being recognized in a jurisdiction, via a white-label solution, or, they operate out of a grey area.

A lot of international casinos operate out of the grey area, where the local regulations in a market do not cover what happens with these international casinos, and they can gain access, although without the recognition of the domestic authorities. This is becoming increasingly rare in Europe and the rest of the world, as many gambling authorities have reformed their laws to directly address the international casinos. Either, they push them to pick up licenses with the domestic authorities, or, partner with a local institution that has a license or permission to operate in the market – this is a white label solution.

What’s in it for Operators

Georgian based operators targeting international audiences will need to be mindful of these domestic market laws. While the taxation is favorable in Georgia, a lot of regulated markets have “place of consumption” tax laws, meaning they will still have to pay the domestic gambling duties. Also, they may need to partner with local companies in a country they target, or obtain a secondary license there as well.

However, there are many perks to using Georgia as a base, as they can save considerably on the cheaper licensing fees, more favorable operational costs, and, should Georgia build a strong reputation, they may be able to access more European and Eurasian countries.

Impacts of International Operators in Georgia

This proposal still needs to pass through Georgia’s legislative process before any talk of international licenses can be held. The incentives for the government are pretty straightforward. By leveraging the license costs and tax duties, they hope to bring in foreign operators who will use Georgia as a base of operations for their online casinos and sportsbooks. Should this come to fruition, Georgia may be able to attract smaller to mid-sized operators, but new markets can be risky territory for operators too.

Especially as gambling laws can change, taxes can be steadily increased, and it all pivots on how influential Georgian iGaming can become in giving licensed operators open doors to more countries abroad. Europe is already a difficult region to break into, as local laws increasingly require local licenses, and grey markets are gradually disappearing. However, Georgia is also a strong base to target emerging Eurasian markets such as Armenia, Azerbaijan, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan.

Georgia could definitely benefit from the boosted iGaming infrastructure, jobs, and investors that this international licensing framework would bring. But there are still questions about its sustainability, whether or not Georgia can build an international reputation, and which operators Georgia would likely attract.