“All of Russia Will Arrive Here” – Tax Disadvantages for Casino “Rooms Kazbegi”

Information Center of Mtskheta-Mtianeti

According to government resolution # 250, signed by prime-minister Vano Merabishvili, a casino established in the Kazbegi district had its license fee waived. The casino is planned to be opened in the Rooms Kazbegi hotel which belongs Teimuraz Ugulava, a famous businessman and owner of Holiday Inn’s Georgian franchise. The hotel and casino have not yet been officially opened.

By law, an individual has to pay 5 million lari as a tax to get a permit for opening a casino in Georgia. There are exceptions to this law however; for example, in Batumi, the territory surrounding Bazaleti Lake in Dusheti district, Kobuleti and Borjomi districts casinos are taxed 250 000 lari per year. In Akhaltsikhe, casino owners only have to pay 100 000 lari for a license to open a casino.

The instances in which individuals are exempted from paying license taxes are regulated by the law. According to national law, anyone is welcome to open casinos in Gudauri recreation zone, Bakuriani, Tskaltubo and Signagi districts without paying any taxes. Additionally, casinos opened in small hotels in Batumi, Kobuleti and Khelvachauri districts are exempted as well; casinos in the villages of Anaklia and Ganmukhuri in Zugdidi district do not have to pay taxes either.

When construction begun on the Rooms Kazbegi hotel, central and local authorities in Kazbegi started paying more attention to the development of the local casino business. In January of 2012, the Kazbegi district administration cut casino fees in half, taxing casinos 30,000 lari per square meter of space, 15,000 lari per game table, and 1,500 lari for each slot machine.

Kazbegi district governor Viktor Sujashvili told ICMM that no casinos or slot machines were in operation in the district at this time: “Not a single casino works in Kazbegi now. In several days, hotel Rooms Kazbegi will be opened. I cannot claim anything, but they might open a casino in it as well,” Sujashvili said.

Levan Kalandadze, head of economic branch of the political party New Rights, has followed the development of the gambling business in Kazbegi with skepticism. He said that despite tax advantages adopted years ago, the gambling business did not develop in Tskaltubo, Signagi or Gudauri. “It is important to reduce taxes for the development of the gambling business but it is not enough. In order to develop the business, economic policies and a unified strategy should be created. The gambling business should be part of the tourism strategy. Incorrect and unbalanced urban development of the country makes the casino business unprofitable in the regions. This business might be successful in Batumi where a lot of foreign tourists arrive, but why would people go to spend their money in Kazbegi, where there is no infrastructure, no hotels and no roads?”

Nevertheless, the President of Georgia has a different set of expectations on the matter, expecting that “the all of Russia will arrive here”. “It is a well-selected place. There will be a casino behind it. The entire Russian population will arrive here; let them spend all their stolen money here. It is not a problem at all; they can spend money here. There landscape is so beautiful here that it will be hard to expel people from here. They will sit here in summer and in winter,” President Saakashvili said on April 9, 2012 during a visit to the hotel Rooms Kazbegi construction site.

There are 156 high standard rooms, a 25-meter long swimming-pool, a casino, a spa-center, a fitness-club and conference halls in the Rooms Kazbegi hotel and will receive its first visitors in a few days.

Ltd Hotel Kazbegi was registered on June 27, 2012. Teimuraz Ugulava owns a 100 % share in it. Zurab Nakeuri is the director of the company.