Hundreds of people from Azerbaijan travel to Georgia, Russia, and more distant countries every year to enjoy casinos. This is not just a matter of interest but also means a significant amount of financial resources being directed to foreign markets. At a time when regional countries are increasing their revenues in the entertainment and casino tourism sector, Azerbaijan is unable to fully utilize its potential in this field.
However, with the right legal framework and strict control mechanisms, activities of casino could bring both substantial financial resources and a flow of tourists to the country.
China and the USA: The kings of the casino
The United States is considered the leading country in the world in terms of the number and popularity of casinos. In Las Vegas alone, over 1,000 legal casinos operate. In 2023, the total revenue from commercial casinos in the U.S. exceeded $60 billion.
One of the highest-earning countries in the casino industry is the People's Republic of China. In 2023, Macau—a special administrative region dedicated to casinos—generated a total gross gaming revenue (GGR) of USD 22.7 billion. The Macau government collected USD 8.1 billion in tax revenue from gambling activities in 2023.
Georgia and Russia's casino strategies
The casino business in Georgia is one of the most developed and liberalized sectors in the South Caucasus region. The country has rapidly advanced this industry by creating favorable legislation and a tax environment for both local and foreign investors. Georgia can also be called a regional casino market.
Tbilisi, the capital of Georgia, hosts the country’s largest and most luxurious casinos. In 2024, the turnover of Georgia’s casino sector reached 28 billion USD. This sector contributes significant tax revenues to the state budget and plays a crucial role in boosting tourism. In 2024, over 20,000 people were employed in this industry, with an average monthly salary of 1,182 USD.
In 2023, Russia’s casino industry generated total revenue of approximately €2.1 billion, making it the second-largest gambling market in Europe.
Russia’s four main casino zones—Krasnaya Polyana (Sochi), Tigre de Cristal (Vladivostok), Siberian Coin (Altai), and SOBRANIE (Kaliningrad)—collectively contributed 2 billion rubles in taxes to the state budget in 2023. Around 1.5 million visitors gambled at these four casino zones.
Financial pyramids and illegal casinos in Azerbaijan
Financial pyramids always operate by attracting new participants to pay profits to earlier members. These systems are illegal and function in the informal sector of the economy. In Azerbaijan, many pyramid schemes have been actively operating in recent years. They lure people with high interest rates, but in the end, investors often lose their money.
Illegal casinos operate in violation of state laws, undermining tax collection and economic diversification. The widespread presence of underground casinos and gambling dens in Azerbaijan also leads to financial losses for the local population. Illegal casinos pay no taxes to the state budget, reducing public revenue. There can be no talk of attracting foreign tourists in this context.
Illegal casinos and gambling activities often lead to significant financial losses and personal tragedies for individuals.
One of the most effective ways to combat illegal casinos is to legalize and regulate these activities within a defined framework. Legalizing casinos could not only stimulate entertainment and tourism development while attracting foreign visitors, but also play a crucial role in formalizing the informal economy, increasing tax revenues, and ensuring financial transparency.
Economist Eldaniz Amirov told APA that casinos and financial pyramids are completely different concepts, both economically and legally. He noted that while activities of casinos aren't currently permitted in Azerbaijan, they're recognized both as an economic activity and a major form of entertainment globally: "The time will come when Azerbaijan too will allow activity of casinos. There are concerns that casinos could be used for money laundering, which partially explains the current prohibition. However, it's possible to create sophisticated mechanisms to prevent money laundering through casinos.
While Azerbaijan doesn't have official casinos, various cash prize-based games are legally conducted. There are specific venues where casino-style games could potentially be organized. I believe this would contribute to both the development of our tourism sector and the emergence of new entrepreneurial ventures."
Legalization of casinos - a new page for the economy
Due to its geographical location, climate, and infrastructure, Azerbaijan is a favorable destination for tourism in the region. A casino infrastructure—combined with hotels, entertainment centers, and event venues—could make the country’s tourism offerings even more attractive. Especially for tourists from Arab countries and the CIS region, Baku and other parts of Azerbaijan could become a new destination for “gaming tourism.”
This is particularly important considering that Azerbaijani citizens currently spend millions in casinos abroad. This not only results in currency outflow but also in the loss of potential within the tourism sector. Establishing local casinos would help retain this money within the country and attract additional foreign tourists, thereby bringing in foreign currency. With proper financial oversight and transparency, it would also expand the tax base.
Economist expert Khalid Karimli stated in an interview with APA-Economics that he has a positive view on the restoration of casino activites: “Like other types of entertainment, casinos should also operate legally so that tourists can easily access all forms of entertainment when visiting the country. Although casino activites are currently restricted in Azerbaijan, we observe that these activities are being organized illegally. The secret organization of such ‘gambling’ games limits the ability to monitor and regulate this area. Casino activites could be organized in specially designated locations. Standards and regulations must be defined for the selection of these areas. Once these standards and rules are in place, business entities can legally engage in this activity.”
Khalid Karimli considers the presence of casinos essential: “Because people want to have fun. For that, our citizens travel to Georgia, Russia, and Switzerland. This means a significant outflow of both tourists and financial resources from the country. I support the full restoration of this activity. Currently, various lottery games are legally organized in the country, and these lotteries are a type of gambling. At the same time, to develop the tourism sector, we must absolutely restore certain freedoms. Tourists generally prefer destinations where such freedoms are granted when choosing places for rest and entertainment. The restoration of casinos would have a very positive impact on the country’s tourism, entertainment, and hospitality sectors. I believe legalizing this field is extremely important both to prevent the outflow of local tourists and to attract foreign ones.”
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“Casino hotels”
The legalization of casinos not only creates a source of income for a few large investors but also leads to the formation of an entire economic ecosystem. Various service sectors and new businesses emerge around casinos, which stimulate the development of entrepreneurship.
Samir Dubendi, Chairman of the Board of the Azerbaijan Hotels and Restaurants Association and Executive Director of the Azerbaijan Ecotourism Association, told APA-Economics that casino operations are a significant economic activity in many countries.
He noted that countries like the USA, the UK, Spain, and Italy are among the pioneers in this field: “I think the experience of these countries should be revisited. The problems these countries have faced over the years should be studied. Additionally, regulation mechanisms and a legal framework for this sector should be created. A large hotel business also develops around the casino industry. 'Casino hotels' are famous, and in these hotels, besides the casino, substantial profits are made from accommodation, food, and services.
The social and economic impacts of this sector must be evaluated, and in-depth analysis should be conducted. The location of casinos is also of significant importance. Casinos should primarily be located away from educational institutions and city centers.
Casino business – strengthening the non-oil sector
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When casinos begin operations, various types of taxes are paid to the state from this sector. License fees, income taxes, payroll taxes and social payments, value-added tax, and more. This is especially significant in the context of state policies aimed at strengthening the non-oil sector.
This sector is not limited to gaming alone – it also creates job opportunities for thousands of people. Managers, marketing specialists, technical staff, security personnel, and service staff – the casino industry could be a broad employment platform targeting both professional workers and those seeking new jobs.
Tourism expert Jeyhun Ashurov told APA-Economics that it is a reality that a special segment of people travel to other countries for casino games: "These people spend their money abroad. Legalizing casinos in Azerbaijan will increase tourism potential and attract additional income to the country. Some time ago, there were discussions about creating such opportunities in the Sea Breeze area.
At the same time, when casino activities are implemented, all factors must be considered. Steps should be taken to prevent potential harmful effects on the country and society."
It is no secret that illegal casinos operate in Azerbaijan, and law enforcement agencies have repeatedly uncovered such establishments. In addition, there are online casinos engaged in fraud. The operation of legal casinos in specific areas of the country could boost tourist flow, which, in turn, could provide a significant boost to tourism development and an increase in budget revenues.
Global experience shows that when the operation of casinos is properly managed, it not only serves as entertainment but also creates a strong economic stimulus. If Azerbaijan takes steps in this area, it could not only create a new source of income but also bring back the financial and tourism potential that flows out of the country. The key is to carry out this process responsibly, transparently, and with a socially-oriented approach.
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