Scope and Legal Foundations of the Law
The first article of the Georgian Law on Gambling Games defines its subject: the law establishes the legal grounds for the organization and conduct of lotteries, gambling and profit-making games in Georgia, as well as for the supply of gambling and/or profit-making games. As a body of sectoral law it therefore covers games held at physical facilities, such as casinos, slot machine halls, gambling clubs and gaming halls; games organized through the internet, the telephone or specially equipped electronic means; and the supply of essential products and services that can influence the results of such games. If you intend to operate in this field, it is this law's conceptual apparatus that determines which activity falls under which permitting regime, and its definitions are applied consistently by the Revenue Service when examining permit applications.
The Conceptual System of Gambling and Profit-Making Games
Article 3 of the law defines the core terms of the sector. Gambling games are games whose result depends wholly or partly on chance; they are conducted by means of cards, dice other than backgammon, the gaming wheel (roulette), a gaming machine, a casino table, a club table and/or other gaming inventory, and participation offers the possibility of monetary winnings. The organization of gambling games, other than a gambling tournament, is permissible only in a casino, a slot machine hall, a gambling club and/or the systemic-electronic form envisaged by the law. Systemic-electronic organization means holding games using the internet, the telephone and/or specially equipped electronic means, and in the case of international organization participation is not allowed for Georgian citizens. A casino is defined as a specially equipped building or part of a building where the organizer conducts gambling games and the play-out of monetary winnings by means of roulette, cards, a casino table, a club table, dice and/or other gaming inventory other than a gaming machine. A hybrid electromechanical roulette wheel that is mechanically activated also counts as a casino table, and a table at which two or more casino representatives simultaneously conduct games counts as as many casino tables as there are representatives conducting the game. A gaming machine composed of several gaming places counts as that many gaming machines. A gambling tournament is a game conducted by the holder of a casino and/or gambling club permit by means of a club table, and it may be organized both on and outside the licensed premises.
Lotteries and Profit-Making Games
A lottery is a voluntary group or mass game in which the organizer plays out a prize fund under publicly published, established rules and conditions; the occurrence of a win is a matter of chance and cannot be specially arranged. The types of lottery are the draw lottery, whose process is divided into separate complete cycles, and the instant lottery, whose result is determined on the spot by checking the ticket or by playing out directly on the ticket. The profit-making games are: lotto, a group game in which the win depends on a full or partial match of number or symbol combinations; bingo, a group game using number cards or an electronic board; the totalizator, a game conducted through players placing bets on the forecast outcome of a competition, a game or another event or events, where the win depends on the size of the bet and the outcome; and the promotional game, which is conducted for the purpose of the rapid and effective sale of a specific type of product or service, with a free ticket and without any participation fee. The prize fund is an amount recognized before receipt as a solid liability in favor of the holder of the winning ticket; loading it with any other obligations is prohibited, as is its use, wholly or partly, in financial, commercial, production or other turnover, except for the benefit derived from placing the fund in a banking institution. The interests of totalizator players are secured by a bank guarantee or a financial risk insurance policy. The casino safe is a specially equipped windowless room with a single entrance door, where the casino reserve amount is kept, equal to at least 10 000 GEL for each casino table, together with non-stationary gaming inventory such as roulette balls, chips, card decks, dealing shoes and dice.
The Player, Dependent and Prohibited Persons
A player is a person who participates in a game with the aim of obtaining a win. A person dependent on gambling is a natural person who has an irresistible desire to play gambling and/or profit-making games and is addicted to them, and whose data have been entered in the list of dependent persons, a database into which data are entered on the basis of a judge's order or the person's own application to the Revenue Service. A prohibited person is a person barred from participating in gambling and profit-making games, except promotional games: these are persons employed in a budgetary organization, including civil and public servants and persons holding state-political and political offices; persons employed in a national regulatory body; persons employed in the National Bank of Georgia; and members of a family registered in the unified database of socially vulnerable families. The database on such persons constitutes the list of prohibited persons. The lottery organizer is the winner of a tender organized by the Ministry of Finance, the holder of the exclusive right to organize and conduct lotteries, operating under the conditions envisaged by the law and by contract. The law also defines the infrastructure roles of the sector: the agent supplying distribution services, the retail seller, the cash desk for systemic-electronic games, the selected person that deploys and operates the electronic control system, and the supplier that supplies essential products or services capable of influencing game results.
The Exclusion of Skill Games
Under Article 4 of the law, games conducted using machines, devices, the internet, the telephone, specially equipped electronic means and other means, in which no element of chance is provided for, do not belong to lotteries, gambling or profit-making games, including in systemic-electronic form. Their purpose is the testing or demonstration of participants' special knowledge, intellect, dexterity, adroitness or other special ability. This exclusion draws the boundary between the permitting regime and free economic activity: where the result of a game depends solely on the participant's ability and chance is excluded, the Law on Gambling Games does not apply, and no gambling permit is required. Determining on which side of that line a concrete product falls is in practice the first question for anyone planning a game-based offering.
State Control and Grounds of Liability
Under Article 36 of the law, the Ministry of Finance of Georgia is obliged to impose control over the observance of the requirements of every point of the law and of the rules of the games, the regulations. The same chapter establishes the regime of the electronic control system: on the basis of a contract concluded between the Revenue Service and the selected person, the selected person must deploy the electronic control system of gaming business control in accordance with the rules established by the Minister of Finance and ensure its operation. The purpose of the electronic control system is precisely the control of the permit holder's observance of permit conditions and of legislative requirements. In terms of liability, Article 37 of the law provides that liability for violation of the law is determined by Georgian legislation; that the failure of game organizers and suppliers of gambling and/or profit-making games to fulfill the requirements established by the law constitutes a violation of permit conditions and entails liability in accordance with the Law on Licenses and Permits; and that the forgery of lottery tickets or of other documents confirming participation in profit-making games is punishable under Georgian legislation. Together these provisions form the enforcement backbone of the sector: administrative and, where applicable, criminal liability is layered on top of the permit conditions, and the Ministry of Finance's control extends to every point of the regulation.