Page 56 - GEORptDec19

supervision.
The gambling industry’s turnover in Georgia has increased almost 200-fold in the past 10 years.
Most generated profits are sent to offshore companies that operate casino and other betting and gaming enterprises in Georgia.
Most brick and mortar casinos operating in the small nation are located in Batumi, known as “The Las Vegas of the Black Sea”, and half an hour from the border with populous Turkey. That fact points to how Georgia’s gambling industry evolved: it started with casinos dedicated to Muslim customers in neighbouring countries who lack such attractions at home. They served as a platform for promoting online operations, creating loyal customers.
Loose advertising regulations in Georgia then made it possible for a broad expansion of online casinos throughout the country. The high poverty rates in the nation have also helped drive the spread of gambling, with negative social effects.
A large part of Georgia’s gambling industry is accounted for by online operations. The country’s most visited websites are Adjara (a portal for gambling sites and sports news), adjarabet.com and crystalbet.com. The trio are among the 10 global websites most visited by Georgians (they show up in the rankings besides websites such as youtube.com and facebook.com). Georgia’s ruling party Georgian Dream has avoided regulating the gambling industry and the opposition accuses the party leadership of deriving illegal revenues from the owners of betting businesses in exchange for the lack of regulation.
“All these problems are familiar to the authorities, but they are not moving forward. Such inaction is the result of lobbying, which is done at a higher level than that of members of parliament and is directed at the entourage of [Bidzina] Ivanishvili [the billionaire oligarch and ex-PM who heads Georgian Dream]. One of the main lobbyists of the gambling business is Ucha Mamatsashvili. That [lobbying] is what gives this business a guarantee [to remain unregulated,” said Levan Gogichaishvili MP, the initiator of a draft law on gambling.
At such a magnitude, the gambling industry in Georgia poses multiple threats ranging from money laundering and other financial crimes to exchange rate volatility.
The gambling sector is undoubtedly always at risk of money laundering, as noted in a US State Department report on Georgia.
The International Monetary Fund has also taken an interest in Georgia's gambling industry turnover. It did so lately with a​ ​technical assistance report​.
9.2 ​Major corporate news 9.2.1 ​Oil & gas corporate news
First-half net profit at Georgian Oil and Gas Corporation (GOGC) plummeted by 68.5% y/y to $11.9mn, despite robust Ebitda, dragged down by foreign exchange effects, according to unaudited results. Revenue was up 17.8% y/y to $160.4mn in the period, mostly due to a 19.8% y/y ($106.7mn) increase in the sale of gas. Revenue from electricity generation, the second largest revenue category for the company, was up 21.6% y/y, while Georgian lari (GEL) denominated gas pipeline rental revenue was down 7.1% y/y.
Meanwhile, operating expenses increased 14.9% y/y to $130.9mn in the first half of the year. The cost of gas, the largest expense category, which
56​ GEORGIA Country Report​ December 2019 ​ ​www.intellinews.com