Economic Freedoms in Georgia
Georgia’s independence as a nation has led to a steady increase in its economic freedoms in the last few decades, and the country is currently classed as ‘very high’ on the Human Development Index. With a population of 3.7 million, Georgia is a member of many influential international organizations, and despite a period of economic and political instability following Georgia’s withdrawal from the Soviet Union in April 1991, the Georgian economy has been steadily growing in the 21st century.
This economic upturn is largely due to an increase in economic reforms and freedoms, with the nation seeing a steady reduction in poverty and unemployment in recent years. Georgia’s economy is currently forecast to grow by 6.5% in 2022 – a positive projection despite the long-term global setbacks of the coronavirus pandemic.
Many individuals in Georgia have world-leading levels of economic freedoms, with a mostly unrestricted ability to work, consume and invest money as they wish. As of 2021, the small nation ranked 12th in the world on The Heritage Foundation’s Index of Economic Freedom. Despite this relaxed economic approach, the Georgian government has recently proposed major restrictions on the online casino industry – is this the right idea for the nation’s growing economy?
Why the ban?
The Georgian prime minister, Irakli Gharibashvili, has recently been calling for an all-out countrywide ban of online casinos. He has criticized the harms of gambling addictions, and sees the online industry as a source of financial losses for Georgia’s economy. He has publicly stated his disapproval of the export of Georgian Lari in the online casino market, as well as the damaging impact of online gambling on young people’s finances.
The PM is in favor of a substantial increase in taxes on online casinos, an increased legal age limit for online gamblers, and a total ban on gambling-related advertisements. This comprises the first stage of his proposed ‘two-phase’ approach – the second phase being the introduction of legislation banning online gambling completely. Such a drastic ban would be the most severe approach to online gambling of any Eastern European state, and would certainly have an impact on Georgia’s economy, for better or for worse.
The Global Market
It’s interesting to compare Georgia’s proposed shutdown to the online gambling scene in the USA, which has been opening up in recent years with the legalization of online casinos in certain US states. The US market is an exciting one for those in the industry, with many global brands seeming hopeful to break into the increasingly competitive US entertainment market.
The legalization of online sports betting and gaming offers financial incentives for US states and other brands worldwide, as the growing market is creating new jobs, increased taxable revenue and new opportunities for worldwide brand partnerships. Gharibashvili’s proposed ban would include the prohibition of some of the best casino sites the US has to offer, cutting the small nation off from this lucrative market.
The prime minister has certainly expressed valid concerns about the risks of online gambling and the negative impacts it can have on the livelihoods of people in Georgia. However, he may not have considered that the ban will have its own downsides, with people prohibited from getting involved and profiting from these lucrative and rapidly growing global markets. An involvement in the global market could be beneficial to the Georgian economy, by bolstering the nation’s economic freedoms and creating profitable partnerships.
Is the ban a good idea?
The coronavirus pandemic appears to have led to a major hike in global betting markets, with many of those forced to stay at home finding entertainment and financial bonuses in the online casino world. It may not make sense for Georgia to ban one of the world’s most rapidly expanding and lucrative online businesses, especially in a period of economic recovery following on from the global COVID-19 shutdowns. As a global industry that never sleeps, the online gambling market provides major opportunities for economic success, and many Georgian businesses may wish to establish their own place on the scene.
However, there are certainly downsides to online gambling and the prime minister has expressed very legitimate concerns about those who may develop gambling addictions, or get themselves into worrying amounts of debt. It’s definitely important to consider the impacts gambling can have on people’s welfare, relationships and financial situations. Gharibashvili’s concerns about online gambling are reasonable, and are shared and understood by many citizens of Georgia and the wider world.
The Georgian PM has still maintained a willingness to work with the nation’s parliament to develop ‘optimal and reasonable’ solutions to the problems caused by online gambling. This suggests a different approach for Georgia could be possible – with renewed regulation of the industry, the enforcement of stricter regulations could prevent rogue sites from operating, and encourage Georgian people to gamble responsibly and safely.
Globally, major sites are making sure to play their part in these efforts, with many offering various safety features such as spending limits and self-imposed restrictions for players. An all-out ban could stop problems at their source, but it may simply force the Georgian gambling market underground, making it near impossible to properly regulate. It’ll certainly be interesting to see how the proposed ban pans out, and how the country approaches the gambling market in the coming years.