The Framework of Reporting Obligations
The relationship with the Revenue Service is part of everyday life for a gambling organizer, and this relationship takes place within a reporting framework defined by law. The twenty-ninth article of the Law of Georgia on Organizing Lotteries, Gambling and Profitable Games obliges the organizer to carry out the registration of paid winnings, create an electronic database and submit the relevant information to the Financial Monitoring Service of Georgia under the procedure established by the legislation.
Other obligations established by the same article are also the subject of preparation for inspection: the organizer conducts the game and the payment of winnings in accordance with the regulations and/or the rules of the systemic-electronic game, gives the player a written confirmation upon request, examines claims within the period established by the regulations, pays fees and taxes on time, and notifies the Revenue Service in writing before the termination or renewal of the activity.
The Two Layers of Control
The control system is built in two layers. Under the thirty-sixth article of the law, the Ministry of Finance of Georgia is obliged to impose control over the fulfillment of the requirements of every point of this law and of the rules of the games — the regulations. The article 37-2, in turn, gives the Revenue Service the right to impose control over the fulfillment of the conditions defined by the contract concluded with the Ministry of Finance by the holder of the exclusive right to organize and conduct a lottery.
The peculiarity of this second layer is the time axis: for this purpose, the state of fulfillment of the conditions defined by the law, by other normative acts and by the contract may be inspected at any time, while the procedure of inspection is determined by a normative act of the minister of finance. The lottery organizer, moreover, is obliged to ensure the provision of the information necessary for the exercise of control — informational readiness here is a statutory requirement, not a courtesy.
What the Organizer Must Have Ready
The practical checklist for preparing for an inspection is read from the law itself. First: the electronic database of the registration of paid winnings and the facts of submission to the Financial Monitoring Service. Second: the rules of the game — the regulations — and the rules of the systemic-electronic game, which underlie the procedures of paying winnings. Third: confirmations of the payment of fees and taxes, including the history of acquiring payment marks.
Fourth: the compliance of the gaming infrastructure — video recording, its storage and submission, the arrangement of cash desks, access to the electronic control system and the payment of the fee to the selected person. Fifth: the written notifications sent to the Revenue Service on the termination and renewal of the activity. Each of these blocks is a separate checkpoint, and their advance audit significantly reduces tension at the time of inspection.
The Price of Violation
The sanctioning background is also known: the organization of a lottery by an unauthorized person entails a fine of 50000 lari, and each subsequent one — 150000 lari. For organizers operating outside the lottery, however, the spectrum of sanctions is also defined by law — the violation of permit conditions ends with a fine and the risk of suspension or cancellation of the permit, and it is precisely reporting discipline that is the layer which manages this risk.
Frequently Asked Questions
To whom is information on winnings submitted?
The organizer registers paid winnings in an electronic database and sends the relevant information to the Financial Monitoring Service of Georgia under the procedure established by the legislation.
Who imposes control?
The Ministry of Finance monitors the fulfillment of every requirement of the law and the regulations; the Revenue Service — the contractual conditions of the lottery organizer, at any time, under the procedure established by an act of the minister of finance.
In what format is reporting done?
The formats and periodicity of reports are established by acts of the service — these details require verification against the current regulations; the law itself establishes the obligations, while the reporting procedure lies at the subordinate level.
What fines exist for lotteries?
The organization of a lottery by an unauthorized person entails a fine of 50000 lari, each subsequent one — 150000 lari; the fining is carried out by the Revenue Service.
How We Help on Legal.ge
The Legal.ge team helps organizers prepare for inspections: it conducts an audit of reporting obligations, reveals defects of documentation and prepares the position for communication with the regulator.
Contact us through Legal.ge — an inspection is better treated as a scenario discussed in advance than as a surprise.
In the preparation process we also emphasize the link of liability: the same obligations that are the subject of reporting also create the basis of sanctions — their violation is considered a violation of permit conditions. This means that reporting discipline and the defensive position are two sides of the same matter: the better something is documented and reflected in the system, the less room for interpretation remains at the inspection. And conversely — a defect ignored for years grows, in a single inspection, into a multi-faceted violation.
Before an inspection, the distribution of roles within the team is also recommended: who leads the communication with the inspectors, who supplies the documentation, who records the process. Such a simple organizational step often does more for the outcome than the quantity of the documents themselves — because an inspection is, in the end, not only a matter of facts but also of the perception of the process.