Republic of Georgia Bans Gambling Ads, Blocks Gaming Sites
The Republic of Georgia has draft legislation to restrict gambling advertisements and block payment processors which fund internationally licensed gambling sites. Georgian media company Commersant reported that the bill is designed to stop all gambling advertising within the Transcaucasian nation.
Georgia’s Ministry of Finance also is considering a law which would restrict gambling for anyone under the age of 25. Local gaming operators say the bill will backfire, though Finance Ministry officials say it is designed to stop the harm to society that problem gambling sometimes causes. Georgian officials also plan to hire a company to help it locate sources of illegal gambling, so the Finance Ministry can begin to sanction illegal international gambling sites which operate inside the country, which used to be a part of the Soviet Union.
The officials believe Georgia casino operators promote themselves as glamorous ways to live — like the Casino Shangri La ad shown above — which they believe could lead citizens into a problem gambling. Critics of the new policy say Georgian gamblers will move to international licensed online gambling sites. They also argue that citizens are media savvy enough to distinguish advertisements from real life.
While people can aruge about the effect of advertisements, banning casino gambling outright does not stop bettors, but drives them underground. It is a predictable pattern. Like any prohibition of a popular activity that citizens do not see as criminal, outright bans drive the activity underground.
$3,830 Fines for Violators
Georgia Today, another publication in the Republic of Georgia, reported that those who violate advertising rules will be subject to fines of $3,830 per day in US dollars. The international gaming media noted that such fines are low, if the intention is to deter gambling operators. A similar law in France some years ago, designed to enforce the will of ARJEL, allowed French agencies to find ISPs up to $500,000 a day.
The Georgian government plans to enforce its new gambling ban through payment processors. Officials will try to block credit cards, web wallets, and electronic payment sites which help gamblers deposit and withdraw funds at an online casino.
UIGEA and Gambling Payment Processors
In the United States, the UIGEA’s attempts to block online gambling through payment processors was only partially successful. While Neteller and Moneybookers (Skrill) stopped taking US business for a number of years, people still paid casinos with Visa and MasterCard.
Also, the UIGEA ban led to the creation of a number of alternative payment methods. Gaming sites and the payment processors who served them found ingenious ways to make payments, from gift cards bought at CVS and Walgreen’s to the payment in merchandise like golf balls and flowers — though those items often were only item codes used to disguise real money payments.
Georgian Gaming Revenues at $2.3 Billion
The Finance Ministry reported that Georgia’s online gambling industry generated $2.3 billion officially last year. Ministry officials also claimed they think that figure is only a small fraction of the real amount of cash that flows to the gaming sites.
Government officials admitted they have no way of collecting accurate information on the amount of money flowing to licensed gambling operators, even including the land-based casinos and gambling halls, and much less the online gambling sites.
90 Illegal Betting Shops, 6400 Illegal Slots
In a June 30 report, the Republic of Georgia estimated the country had approximately 6,400 slots and 90 betting shops which were operating illegally. The same report said that 7 online gambling sites were operating illegally, though that number once again sounds low, given the nature of the Internet.
Georgian officials plan to collect more accurate statistics in the near future. Recently, the Finance Ministry announced a tender for an auditing company to help determine how much revenues is being turned over by the gambling industry.
Actions on Illegal Gaming Coming in December
That tender recently ended and the government says it plans to have the company begin reporting on illegal gaming operators by December 2018. Georgia’s tax rate on gambling is 7%, so any illegal operators would be flouting Georgian tax laws. Bans on gambling ads are a growing trend in Europe. In the summer of 2018, Italy banned gambling ads for Association football games.
Ireland’s president Michael Higgins also has discussed banning bet ads for Irish sporting events. Higgins appears to have been ramping up rhetoric prior to his reelection campaign, but he would not do so if there were not widespread support for such a policy.
Even in the gambling-rich United Kingdom, one former UK gaming exec called for a ban on betting advertisements during televised sporting events, while British MPs called for all UK betting ads to have warnings about gambling addiction. While those policy suggestions are considered to be on the edges of British politics, the FOBT policy change is a sign that the UK gambling industry could face a growing backlash, much like the Italian gambling industry did.