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Georgia’s Black Sea Coast: Opportunities in Casino MarketJune 2011Department of Tourism and Resorts:Georgia hosted over 2,000,000 foreign visitors in 2010The majority of foreign arrivals originate from the neighboring countries Armenia, Turkey, Azerbaijan and Russia.Georgia implemented simplified entry requirements to boost tourism Some of the countries whose citizens do not require an entry visa to Georgia include the USA, Canada, Israel, Japan, the EU, Norway, UAE, the CIS countries except for Russia and Turkmenistan. Visas can be granted at Georgian borders and airports.Tourism Prospects in Adjara Region and Batumi:Total amount of capital invested in Adjara in 2010 was USD147mln (USD108mln in foreign capital), 49% of which belonged to the tourism sector.Batumi, the capital of Adjara, is attracting worldwide attention for its rapid growth from a quiet coastal city into a popular holiday destination. Batumi is the first city that people will arrive to after crossing the Turkish border at the Black SeaWhile the majority of players in casinos are Georgians, many people come from neighboring Turkey and Azerbaijan where gambling is forbidden. Armenia and Russia recently announced restricting gaming to certain regions of their countries, which may encourage their citizens to travel to Georgia to play.Gaming Industry Legislation:Since legalized gambling was first introduced in Georgia in 1992, it has always been considered a benefit to the country’s economy. The laws controlling the industry have undergone many changes over the years In March 2005 the law ‘On Lotteries, Gambling and other Winning Games’ implemented extremely high licensing fees and tax rates which led many gaming establishments to close.In November 2009 the Georgian Parliament signed an amendment in legislation to exempt Batumi hotels with more than 100 rooms from paying the annual casino license fee for 10 years (previously GEL250,000 or approx USD150,000).This decision has led to growth of the gambling tourism, which can increase number of winter season tourists.Taxation:The tax rates are differentiated according to the type of gambling business and determined as follows:A gambling table in a casino: GEL5,000-10,000 p/monthA slot-machine: GEL50-200 p/monthA totalizator/bingo/lotto cash-desk: GEL300-600 p/monthAn incentive lottery: 10% of the prize fund A systemic-electronic game: GEL2,000-10,000 p/monthCasino Market in Batumi:There are currently 3 casinos operating in Batumi (from largest to smallest):Grand Palace (at Intourist Palace Hotel)Peace (at Sheraton Batumi Hotel)Adjarabet There are two casinos expected to open in hotels under construction:Kempinski Batumi Park (Due to open in 2012-2013)Rixos Belle-Vue Batumi (Due to open in 2012)Source: Georgia Casino Market Overview, Q2, 2011 from Richard Chancellor Opportunities in Anaklia (north of Batumi and Poti):Georgia’s mission to make Anaklia on the Black Sea a flourishing tourist haven is well underway.The construction of hotels in the Anaklia Free Tourism Zone will start at the end of April, with the resort ready to welcome its first holidaymakers in the summer of 2012.The Georgian National Investment Agency (GNIA), the state investment authority overseeing the project, says that more than 100 people have called and expressed interest, with fifteen businessmen having submitted their proposals to date.Keti Bochorishvili, the Head of GNIA, expects “strong interest” from Georgian and foreign investors, saying: “At first, we will select five projects, with a total investment volume of around $ 40 or 50 million.”Investors had the opportunity to travel around the available plots land. They were able to see the area from which the resort’s mineral water is supplied and the construction site for the new Anaklia-Zugdidi airport.The authorities are offering unprecedented terms to investors to encourage the construction of hotels in Anaklia, including land, project support and communications infrastructure, all of which will be provided by the government for free. According to the GNIA, investors will be exempt from income and property tax for 15 years. Other incentives include a plan to construct a new road connecting Anaklia with Poti, a yacht club and a new airport. Furthermore, investors who construct hotels with more than 100 rooms will receive casino licenses for free.Source: Further Details on Existing Projects:The Trump Riviera in BatumiThe estimated $300 million deal signed in 2011 is for two projects in Georgia:The Trump Tower Tblisi would go up on Rose Revolution Square in Georgia’s capital.The Trump Riviera would be part of a planned Silk Road complex that includes a casino, an exhibition hall and a marina, in the resort city of Batumi.Source: Hotels Extend Portfolio to GeorgiaThe year 2012 will mark the opening of a Kempinski property at a prime location in Batumi“Kempinski Hotel Batumi is set to become a new regional highlight, extending foreign business and leisure tourist flow in the region…this new property follows our development strategy – selective growth in key destinations and adding unique properties to the Kempinski portfolio.”Teimuraz Gamtsemlidze, General Director of GIMG, the property’s owning company, added: “As a popular resort destination in Georgia, Batumi draws a lot of tourism to the region.”“Batumi is a well-known leisure destination and is set to develop further due to the subtropical climate, the variety of thermal springs available and the development of casinos.” Source: President Says Americans Should Invest in GeorgiaDavid Lee, AmCham President says Batumi can compete in the US Market: “By offering a different, exotic venue on the coast. The segment in the US is not small, there is a large number of people with money who are going to travel.”“Whatever is attractive to the population of America can also be attractive for a large section of the population of Western and Central Europe. Moreover, we should never forget that countries around Georgia, traditional tourists from Armenia, Azerbaijan, Israel, Turkey and one day hopefully Russia will also return to this beautiful country.”Source: with Levan Varshalomidze, Chairman of the Government of the Autonomous Republic of Ajara (May 2011)Batumi is undergoing rapid development. What are some of the more important projects recently completed?The Intourist Palace and the Sheraton, Batumi Piazza, which is a very beautiful project of Italian style architecture. Other important recent projects include the Batumi Plaza, a commercial and residential building, and the Georgia Palace Hotel, a five-star hotel in Kobuleti. Also I should mention the Radisson Hotel, the Boutique Hotel, the Batumi Dolphinarium, and the Palace of Justice. Batumi Boulevard was recently expanded considerably with various alleys, exotic trees, ‘singing’ and ‘dancing’ fountains, making the night-time in Batumi colorful and exciting.Another very special project completed recently was the renovation of the old city part of Batumi. There are a lot of new attractive places for entertainment as well: very nice restaurants, casinos, cafes and nightclubs that make a visit to Batumi an unforgettable adventure. The renovation of the Batumi Botanic Gardens, which is one of the biggest in the world, and the creation of four protected areas around Batumi with unique nature contribute to the attractiveness of the region.What kinds of projects are now in the confirmed pipeline?Among them are the rehabilitation of the city’s historical districts, reconstruction of the conservatory and opera house with a brand new design, the development of a ski resort and mountain recreational zones in Ajara, construction of various shopping centers and a football stadium, Batumi Aquarium, Argo Entertainment Center, which will be connected to Batumi by a rope road, the Princess Hotel, Batumi Alphabetic Tower, some sophisticated residential buildings and internationally recognized brand hotels such as Kempinski, Hilton, Ritz Carlton, Holiday Inn-Belle Vue, Conrad-Cubic Tower Hotel, and Marriott-Semiramida Gardens. Source: ................
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