There was talk last year, during the initial heat of the financial crisis, that Russia’s four Las Vegas-style gambling zones would not go ahead, due to concerns over how they were going to be funded. Despite attempts by the Ministry of Economic Development to reverse the decision, the original July 1st deadline by which all casinos and slot machine halls need to be shut down still holds, despite the fact that, according to The Independent, only 17 of over 500 Moscow venues have closed.
Sergei Baidakov, the Deputy Mayor of Moscow, told reporters last week that any casino that failed to shut down by the end of the month would face legal action, and suggested that most casinos would become shops or restaurants.
The minor problem is that none of these zones is yet ready for operation. Indeed, building and construction work has not even started, according to reports. One Russian publication sent a reporter to check out progress on one of the zones, who discovered open fields filled with grazing cows.
So it looks as though the law will be implemented, but there will be nothing for gambling operators to fall back on. The question remains, why was the suspension rushed through, despite the fact that the gambling zones have not been prepared? And the answer may be, strangely enough, related to a convoluted desire to scupper the Georgian mafia…(?).
One theory is that the ban is the result of an anti-Georgian campaign that spiralled out of control. Many casinos are rumoured to be controlled by Georgian mafia figures, and some were raided during a political spat between Russia and Georgia in 2006. It was at that time that the then-President Vladimir Putin first proposed the law.
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The reorganization of the gambling industry in Russia is a great idea but the strategy, itself, on how to do so needs to be more firmly based in reality.I live in Krasnodar and the gaming zone in Azov City not only doesn’t have any casinos ready to open, there are still none under construction. We are less than 2 weeks from the supposed drop dead date and the only company, which had even committed verbally, ASATI out of Austria, is now arguing with local officials. It’s a complete SNAFU.The KRR local administration has done everything in its power to encourage the development of the Azov City gaming zone. In fact, Tkachev and his officials have done more than any other zone’s officials in their efforts to jump-start the development of Azov City. I know it is easy and fashionable to blame local bureaucrats for everything in Russia but this is not an instance where they deserve blame.Rather, the lack of results can be directly attributed to the original decision at the federal level to create 4 zones in locations where there is no infrastructure (none!) and no population. Calling these locations “greenfield” would be too kind. Azov City is literally flat farmland (think: heavy black-earth mud) and cow fields (think: cow chips).The logic behind the original decision to create these gaming zones is based on the assumption that if Las Vegas could be built in the middle of the desert then it would be a piece a cake to build mini-Vegas’s around Russia. Wrong. Different dynamics and a different time period mean that the assumption is false.So let’s take a step back and look at why the original legislation was passed and how we can still achieve the ultimate objective but not create a fiasco in the process.Basically there are two types of gamblers in Russia and two types of gaming venues. Each venue attracts a different type of gambler.The larger casinos (slots, shows, card tables, roulette, etc.) tend to attract gamblers who are betting disposable income and if they lose their bank-roll they will not necessarily feel the negative effects in the rest of their life. Gambling may be a compulsion for some of these gamblers but it is also a form of entertainment.On the other hand, game clubs tend to attract a type of gambler who we can call “Joe Six Pack.” These game halls are the actual root cause of much of the negative societal side effects of the gaming industry.There are game clubs (slot machine halls) throughout most of the larger cities in Russia. Game clubs are like banyas in urban Russia, once you notice a couple you start to see one on every city block.The answer is simple. On July 1st, close down everything- casinos and game clubs. Spend the next 2 months confirming that everything is shut-down. Then on September 1st do two things:1. Grant new licenses to the large casino operators in any city with more than 250,000 people. Allow for there to be 1 casino for every 250,000 people. As is the case now, these casinos will continue to pay taxes and be highly regulated.2. Create 4 new gaming zones in locations where there already exists a tourist resort infrastructure. For example, make the coast of the Azov and Black Seas (up to 2.5 miles from the actual coastline) a gaming zone. Cities like Sochi, Taupse, Gelendzhik, Yaisk, Novorossiysk, etc. will be the perfect locations for new gaming zones.The same principle of locating the gaming zones in Kaliningrad and Vladivostok can be applied. The key is locate them in already established resort cities. Development will then occur quickly and naturally.Such a solution will allow Medvedev to stick to his word by showing that all casinos have actually been shut down on July 1st but at the same time, this solution will be based in reality and is very achievable.
What make them decide in banning gambling? It was indeed helpful in one’s nation economy because of the big taxes that are imposed on it. But then the main thing is that it needs to be legalize.
Sounds like the Russian public are fed up with Democracy and want to revert to the old days where they were told how to and where to spend their time and money!This may have a nasty effect on some European countries, who follow Russian political trends as a course of tradition, and to secure Russian approval in order to trade oil etc. Poland has already brought in a gambling ban shortly after the Russians, other states may be next. You can sign up to the petition or liberalised gambling in Europe at http://www.right2bet.net !