Georgia is a country rich in history, culture, and scenic beauty. Tourism plays a vital role in its economy, and casinos are a significant part of this dynamic. Shangri La, operated by Storm International, is a prime example of how casinos drive both tourism and economic growth. However, recent tax changes are reshaping this relationship.
The Role of Casinos in Tourism
Casinos and tourism are deeply interconnected. Gaming establishments like Shangri La attract international visitors who spend not only on gambling but also on local services. Hotels, restaurants, and shops all benefit from the influx of high-profile players.
Darren Keane, CEO of Storm International, highlights this connection: “Foreign players bring more than gaming revenue. They contribute to the broader economy through tourism-related spending.”
In Batumi, known for its vibrant nightlife, and Tbilisi, with its cultural appeal, casinos are a key attraction for wealthy tourists. These visitors often travel with families or groups, spreading their expenditures across multiple sectors.
The Impact of the 5% Cash-Out Tax
The introduction of the 5% cash-out tax has disrupted this ecosystem. Unlike a winnings tax, this levy applies to the total amount players withdraw, regardless of their actual earnings. For high rollers, the tax feels punitive, even when they lose money.
Keane explains, “The tax is driving foreign players away. They now choose destinations like Armenia, where such policies don’t exist.”
The decline in casino visitors is having a ripple effect. Hotels report fewer bookings, restaurants see reduced foot traffic, and retail shops experience declining sales. The absence of foreign players impacts not just the casinos but the entire tourism industry.
Storm International’s Response
Despite these challenges, Shangri La continues to focus on delivering premium experiences. The brand is enhancing its offerings to retain international guests. VIP services, exclusive gaming areas, and fine dining are just a few ways Shangri La maintains its appeal.
Partnerships with hotels and travel agencies play a crucial role. Special packages combining luxury accommodations with gaming experiences attract high-net-worth individuals. These efforts help offset some of the losses caused by declining player numbers.
The Broader Economic Implications
Tourism contributes significantly to Georgia’s GDP. Casinos are a vital component, drawing visitors who spend across multiple sectors. When fewer players visit, the economy feels the strain.
The cash-out tax is also reducing government revenues in unexpected ways. While the tax aims to increase collections, the decline in casino activity means fewer license fees, lower employment taxes, and reduced spending on services.
Opportunities for Policy Reform
To revive the sector, policymakers must reconsider the tax structure. Aligning land-based casino taxes with online platforms, which face a lower tax burden, could create a level playing field. Removing the cash-out tax for foreign players would also make Georgia more competitive.
Collaboration between the government and industry leaders is essential. Storm International advocates for open dialogue to find solutions that support both the economy and the gaming industry.
A Way Forward
Georgia’s casinos have long been a draw for international tourists. With thoughtful policy adjustments, they can continue to drive economic growth. Shangri La’s commitment to quality and innovation sets an example for the industry.
Darren Keane believes in Georgia’s potential. “The right policies can turn things around. Tourism and gaming can thrive together,” he states.
Tourism and casinos are two sides of the same coin. By supporting the gaming sector, Georgia can enhance its appeal as a global destination. The future depends on proactive measures to balance taxation, attract players, and sustain economic growth.