Tax policy plays a defining role in shaping industries, and Georgia’s casino sector is no exception. Recent changes, including a 5% cash-out tax, have sparked heated discussions among industry experts. Darren Keane, Storm International CEO, offers a candid view of these challenges and opportunities for growth.
Storm International and Shangri La: A Legacy of Excellence
Storm International is a global leader in casino management, with the Shangri La brand standing as a hallmark of luxury and innovation. Known for its premium services and exceptional hospitality, Shangri La casinos attract high-profile international players. In Georgia, the brand has become a key contributor to the local economy, drawing visitors from around the world.
Darren Keane explains, “Foreign players are the lifeblood of our casinos. They contribute 90-95% of the revenue.” These players don’t just fuel the gaming floors; they also support surrounding industries, such as hotels, restaurants, and shops.
The 5% Cash-Out Tax: A Game-Changer
The 5% cash-out tax, introduced recently, is a pivotal issue. This tax applies to the total amount withdrawn by players, regardless of winnings or losses. Keane illustrates the problem: “A foreign player can lose $5,000 but still pay a tax on the remaining $5,000.” This policy disproportionately affects high-stakes players, prompting them to seek alternatives in neighboring countries.
Cyprus and Armenia, for example, offer more favorable tax environments. Players are now opting for these destinations, leading to a decline in casino revenues across Georgia.
Ripple Effects on the Economy
The impact of the tax extends beyond casinos. Keane highlights, “These players also spend money on hotels, spas, and retail. Their absence hits the economy.” As foreign players migrate to other markets, the hospitality sector face mounting losses.
Moreover, declining revenues could result in casino closures, job losses, and reduced tax contributions. Keane warns, “If the current policy continues, Georgia will lose its status as a gaming destination within three years.”
Opportunities for Reform
Despite the challenges, there are opportunities to revitalize the industry. Keane suggests aligning taxes on land-based casinos with those for online platforms, which are taxed at a lower rate. He also advocates for removing the cash-out tax for foreign players, a measure that could restore Georgia’s competitiveness.
“We need balanced policies that support growth,” Darren Keane states. He believes that government and industry leaders must collaborate to find sustainable solutions.
Storm International’s Commitment
Amid these uncertainties, Storm International remains dedicated to excellence. Shangri La casinos continue to set a high standard, offering luxury amenities. The company’s focus on innovation and adaptability positions it as a leader in the region.
Keane emphasizes, “We are committed to maintaining the quality that our players expect. But without policy adjustments, the challenges will persist.”
The future of Georgia’s casino industry hangs in the balance. With proactive measures and strategic reforms, the sector can overcome these hurdles. As Darren Keane from Shangri La puts it, “The 5% cash-out tax is driving foreign players away. To thrive, we need policies that attract, not deter.”
Georgia has the potential to reclaim its position as a top gaming destination. The collaboration between industry stakeholders and policymakers will be critical in shaping a prosperous future.