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Akbar Novruz

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In an era where economic diversification is a top priority for Azerbaijan, particularly in the context of its growing non-oil sector, the legalisation of casinos in designated tourism zones is becoming a significant policy consideration. Although Azerbaijan's tourism sector has enormous potential, it remains relatively undeveloped in terms of international recognition and destination branding. Compared to its neighbours, Georgia and Türkiye, which have achieved considerable success in promoting their natural and cultural heritage through effective branding campaigns, Azerbaijan is lagging in establishing a competitive presence in the international tourism scene.

To foster the growth of the tourism sector, diversification is essential. This principle is a cornerstone in the development of tourism in many successful countries. If a destination focuses exclusively on one aspect, it may fail to provide compelling reasons for tourists to return. One critical avenue for expansion is the development of niche tourism, which can significantly enhance a country's appeal as a travel destination. For instance, Georgia's flourishing wine tourism exemplifies how a specialised focus can achieve strong international recognition and attract visitors. Similarly, as global tourism trends evolve, Azerbaijan should also leverage its potential in niche tourism to remain competitive. With regional competitors capitalising on diverse offerings, including casino tourism, Azerbaijan has an opportunity to tap into this lucrative market. By integrating casino experiences with its unique cultural and natural attractions, Azerbaijan can boost its tourism sector, increase tax revenues, and minimise capital outflow. This strategic approach not only enhances tourism visibility but also contributes to the overall economic vitality of the country.

The global casino industry is booming, with total turnover reaching $580 billion in 2024, up from $540 billion in 2023. Projections indicate that by 2028, the market could hit $745 billion. Many countries have already positioned themselves to benefit from this growth. From Monaco and Macau to the United Arab Emirates and Uzbekistan, legalising casino activities has become a tool for accelerating tourism development and increasing state revenues.

Neighbouring Georgia once again provides a clear example of how regulated casinos can bolster a country’s tourism economy. In 2024, the turnover of the gambling sector in Georgia reached $28 billion, employing over 20,000 people, with a significant portion of income generated from foreign clients, particularly Azerbaijani citizens. According to estimates, about 20% of Georgian casino revenue comes from Azerbaijani players. In contrast, Azerbaijan sees these potential earnings leave the country due to the absence of a legal gambling sector.

Similarly, Kazakhstan has built a solid revenue stream from its gambling industry, which generated $2.85 billion in 2023, including $245 million in tax payments to the national budget. Recognising these outcomes, Uzbekistan is preparing to issue licenses for casino operations in 2025, after an estimated $1–8 billion was spent by its citizens on online gaming in 2023 alone. Officials forecast that legal casinos could bring in $2 billion annually for Uzbekistan.

With Azerbaijan experiencing a continuous increase in the number of incoming tourists, the pressure to diversify recreational and entertainment offerings is mounting. Legal casinos could provide a significant boost in this regard, enhancing the country’s attractiveness as a high-end tourism destination.

Experts argue that the absence of casinos in Azerbaijan is a serious handicap for the tourism sector. Not only does it encourage capital flight, but it also prevents the country from competing with regional peers for premium tourism. Legalising casinos, especially in coastal and border tourism zones such as those around the Caspian Sea, could bring a transformative effect. These facilities would attract short-term, high-income visitors from countries such as Russia, Türkiye, Iran, Kazakhstan, and Gulf nations, increasing both visitor numbers and spending.

Legal casino operations are not only expected to boost tourism, but also to create thousands of direct and indirect jobs in hospitality, transportation, construction, and other related sectors. The development of casino-based tourism zones often brings improved infrastructure—such as better roads, airports, hotels, and public services—that benefit both tourists and local populations.

There are also significant fiscal advantages. A regulated gambling sector would provide a new source of tax revenues, which could be directed toward social programs and infrastructure projects. Currently, illegal or online gambling remains a problem in Azerbaijan, often associated with fraud and money laundering. Legalising and regulating casinos would help tackle these issues by bringing gambling activities out of the shadows, protecting vulnerable populations, and cutting off criminal networks.

In the absence of a regulated market, clandestine gambling operations have emerged within Azerbaijan, prompting frequent law enforcement interventions. Online gambling platforms have also proliferated, often preying on citizens through scams. Legalisation would not only stem this underground activity but also reduce the motivation for citizens to gamble abroad or through unregulated means.

The recent decision to regulate casino games through a legal framework permitting them only on artificial land, such as Sea Breeze, for now, can be viewed as a strategic pivot in tourism and economic policy. While the country has traditionally adopted a conservative approach to gambling, this measured liberalisation represents a potential new revenue stream aimed at attracting high-net-worth individuals, luxury travellers, and regional tourists from countries where such entertainment is restricted or absent.

Importantly, the exclusivity of licensing—at a fee of 340,000 manats (200.000 USD) annually—positions casinos not merely as entertainment venues, but as premium offerings tied to luxury tourism infrastructure. By anchoring casino development to designated artificial territories, the state retains spatial control over the industry, minimising potential negative societal impacts while maximising tourism-related economic gains.

Globally, the trend is clear: even countries with historically conservative approaches—like the UAE, which plans to open its first casino in 2027—are embracing this lucrative sector. With proper oversight, transparent licensing, and a strong regulatory framework, casinos can contribute significantly to Azerbaijan’s strategic goals of increasing non-oil revenue, boosting tourism, and curbing illegal gambling.