Regulatory Framework

The Law of Georgia on Organizing Lotteries, Games of Chance and Other Prize Games (the “Gambling Law”) is the primary legislative act, establishing the legal grounds for organizing and holding lotteries, games of chance and other prize games.

 

The changes of the Gambling Law have been approved by the Parliament of Georgia and published on Legislative Herald of Georgia as of 02.07.2020. The very same date the changes have become effective, unless otherwise is directly indicated in the Gambling Law itself.

 

Based on the requirements of the Gambling law, a number of bylaws were executed by the Government of Georgia and Ministry of Finance for the effective implementation of the new amendments.

 

In the following general review of the aforesaid changes, there are given basic amendments that have a mandatory character for the Game Operators (Operator/B2C) and Game Service Providers (GSP/B2B) to be allowed to conduct their activities in Georgia.

 
I.      Introduced definitions with respect to the newly introduced regulatory framework

The Gambling Law has introduced new and/or amended definitions of the terms given under the very same law. The most important changes are considered to be the following:

 

- Selected Person - a person selected by the LEPL Revenue Service of Georgia (the “RS”) to implement the electronic control system of gambling business in Georgia (the “Control System”);

- Provision of games of chance and other prize games - direct and / or indirect delivery of critical products / services to the organizer of the games and / or to a person outside the territory of Georgia on the basis of a permit issued for gambling and / or winning games issued in accordance with the Law of Georgia on Licenses and Permits, which may affect and / or affects the results of games of chance and / or winning games with or without the participation of a Provider;

- Provider of games of chance and other prize games (Provider) – a person, providing games of chance and/or other prize games;

- Critical products / services - products and / or servicesas determined by the Government of Georgia, that include games of chance and/or other prize games (including but not limited to the games, organized in a systemic-electronic form), random number generation platform (RNG), jackpot platform, gaming platform (including server/ servers on which the outcome of the game is disclosed), player database, financial base / system, management system, slot machines and / or other products and / or services provided by this Gambling Law, which may / does affect the results of games of chance and/or other prize games with or without participation of the Provider of games of chance and other prize games;

- Control System – a system, implemented by the Selected Person according to the regulatory framework of the games of chance and/or other prize games under the laws of Georgia, aiming to control the compliance of the permit conditions and the requirements established by the legislation of Georgia by the Permit Holder;

- Management system - a system of internal management and / or control of the Game Operator and the GSP of games of chance and/or other prize games;

- Certificate of Authorization - a certificate issued by a Selected Person, which confirms compliance with the standards / requirements for games of chance and/or other prize games, as well as with some critical products / services introduced / set by the Minister of Finance of Georgia;

 

II.      General requirements of the Gambling Law for Operators and Providers

 

The Gambling Law provides for certain obligations, which Operators and Providers shall comply with. The aforesaid changes determine the keystones of the new gambling policy and approach the Georgian Government has declared for this business sector.

 

In order to monitor the compliance with the permit conditions, the RS has introduced the Control System which is implemented and maintained by the Selected Person (Random Systems International has been selected by the Government of Georgia to carry out services listed below. The actual work is done by its subsidiary, Random Systems Georgia LLC).

 

Pursuant to the Gambling Law, a permit for the activities, envisaged under Article 11 of the Gambling Law shall be issued only to the registered entrepreneur incorporated in Georgia.

 

 

Furthermore, for the rightful distribution of the critical products/services, the Provider and/or Operator shall obtain an authorization certificate from the Selected Person confirming the compliance of the products / services with the established standards/requirements. For the process said, the Selected Person is entitled to request any information and document it seems necessary for the audit and certification process.

 

Additionally, if the game and/or critical product/service is significantly changed, Provider is obliged to inform Random Systems Georgia to receive a consent and provide a certificate of authorization to RS. In case the Provider does not receive the consent of the Selected Person or RS, the Permit Holder shall be prohibited to provide significantly changed game and/or critical product/service.

 

In order to receive services from the Selected Person, the Operators and Providers are obliged to conclude an agreement with the Selected Person and pay the service fees on time.

 

Additionally, the Government of Georgia is authorized to set additional regulations to the Providers and Operators with respect to the implementation and proper functioning of the Control System. The violation and/or any non-compliance of the regulations shall be considered as breach of permit conditions.