Why Azerbaijan should bet on casinos: Billions lost abroad, billions could be gained at home

Every year, hundreds of Azerbaijanis travel to casinos in Georgia, Russia, and other countries for leisure and entertainment. This trend is not merely driven by personal interest; it also results in a significant outflow of financial resources from the country.

While regional countries are steadily increasing their revenues from entertainment and casino tourism, Azerbaijan has yet to capitalize on its potential in this area fully.

If an appropriate legal framework were established and effective control mechanisms implemented, casino operations could bring substantial financial resources into the country and accelerate the influx of foreign tourists. Regulated, licensed casinos could not only contribute to the state budget but also curb the informal sector, thus supporting economic stability.

China and the United States: Global leaders in the casino industry

Source: Lenta.ru

In terms of the number and popularity of casinos, the United States leads the world. Las Vegas, in particular, is considered the hub of this industry, with more than 1,000 legal casinos operating in the city. In 2023 alone, revenue from commercial casinos in the U.S. exceeded $60 billion.

Another major player in this field is the People’s Republic of China. Casinos in the Macau region generated a total of $22.7 billion in gaming revenue in 2023, placing the city among the top global casino destinations.

Georgia and Russia: Regional strategic approaches

Source: Apsny.ge

Georgia has emerged as the most dynamic country in the South Caucasus in developing its casino sector.

Thanks to favorable legislation and tax policies, the casino industry has become a significant part of the national economy. In 2024, the sector’s turnover reached $28 billion, employing over 20,000 people with an average monthly salary of $1,182.

In Russia, casino operations are concentrated in specific zones designated by the government. In 2023, this sector generated €2.1 billion in revenue. The four main casino zones—Sochi, Vladivostok, Altai, and Kaliningrad—together paid 2 billion rubles in taxes. These regions attracted 1.5 million tourists in one year.

Financial pyramids and underground Casinos in Azerbaijan: Economic risks and the need for regulation

Source: APA

In recent years, the proliferation of informal financial pyramid schemes and underground casinos in Azerbaijan has led to significant economic and social challenges. Illegal casinos evade state taxation, undermine public welfare, and exert a negative influence on society. Such establishments contribute not only to personal tragedies but also to the erosion of the government's financial oversight mechanisms.

To mitigate these risks, it is imperative to legalize casino operations and bring them under strict state regulation. This would not only boost tax revenues but also significantly reduce the scale of informal economic activity.

Given Azerbaijan’s strategic geographic location, developed tourism infrastructure, and favorable climate, the country has the potential to become a regional hub for gaming and entertainment tourism. In particular, Baku and other regions could serve as attractive destinations for tourists from Arab countries and the Commonwealth of Independent States (CIS).

What would the Casino offer the Azerbaijani Economy?

Source: Lenta.ru

Legalizing casino activities could provide multidimensional benefits to the national economy. First and foremost, it would stimulate the development of tourism. In the modern era, tourists consider not only historical and natural attractions but also the scope of entertainment options and personal freedoms available.

In this context, Azerbaijan could enhance its competitiveness by learning from Georgia’s experience.

Casinos could also generate additional income for the hospitality, food service, retail, entertainment, and other service sectors. Foreign gaming enthusiasts tend to spend money not only on casinos but also across these related industries. This would boost economic activity and expand employment opportunities.

Source: Gazeta.ru

On the other hand, Azerbaijanis currently spend millions of manats abroad. Legalizing casino operations within the domestic market could ensure that this capital remains within the country. Additionally, foreign tourists would bring in foreign currency, strengthening the country’s balance of payments.

At present, Georgia’s annual casino turnover stands at €16–18 billion, Kazakhstan’s at approximately €3 billion, and Russia’s at over €2 billion. Uzbekistan has also legalized casino operations, and projections indicate this market could grow to €7–8 billion in the coming years. These figures highlight Azerbaijan’s potential in this sector.

Attracting high-income tourists plays a crucial role in this industry. Wealthy visitors from China, Russia, Turkey, and the Middle East spend not only on gaming but also on luxury hotels, fine dining, and premium services. This would significantly increase the country’s overall tourism revenues.

Source: TASS

Granting official status to the casino sector would boost tax revenues and foster sustainable growth in the non-oil sector. Examples such as Las Vegas, Macau, Monaco, and Batumi demonstrate how cities can achieve rapid economic development through the casino industry. The Batumi model is especially noteworthy—between 2012 and 2019, the city experienced an economic boom thanks to its gaming and tourism sectors.

Azerbaijan, with its advantageous geography, tourism resources, and infrastructure, could implement a similar model. The key lies in regulating this sector transparently and legally, while ensuring a balanced development strategy that accounts for potential social risks.

News.Az