Russia´s casinos face exile from cities
The federal government is considering sweeping legislation, proposed by President Vladimir V. Putin, that would force casinos out of Moscow and other Russian cities and into one of four special, more tightly restricted gambling zones.
Two likely would be in less-populated areas of European Russia, though it is unclear precisely where. There also would be one each in Siberia and the Far East; imagine a miniature Las Vegas, albeit in the frozen steppe.
The way the bill is written, relocation to these zones would not take place until 2009. Other changes would push smaller casinos and slot halls out of business altogether, and soon: Those that don’t have at least 10 tables, 50 slots and net assets of us$ 23 million would have to darken their neon lights by July.
The bill, in some form, is all but certain to pass, and not only because Putin proposed it. Many here see gambling as he does: an illness like alcoholism, which is what he compared it to in recent publicized remarks (other politicians have referred to gambling, variously, as a crime, a sin, an evil and a plague). But there are a slew of amendments that would make the bill more lenient, because some legislators call the current version, among other things, unrealistic and unconstitutional.
"It’s way too revolutionary," Samoil Binder of the Russian Association for Gaming Business Development said last week after meeting with industry representatives at a gathering in Moscow that was compared by participants, on more than one occasion, to a funeral. It’s not the spirit of the bill - tighter regulation of an industry that, by nearly all accounts, has been allowed to spiral out of control - that Binder objects to, he says. It’s basically everything else.
"The whole gambling industry is going to collapse," he said, pointing to a potential loss of jobs and what he called an overly ambitious timetable for raising entire casino complexes from nothing.
Gambling has proliferated in Russia in recent years, particularly in the capital, home to the vast majority of the country’s wealth. Its growth has occurred as part of a self-perpetuating cycle: People made, spent - and, apparently, were willing to lose - more money, so ever more gambling houses continued to open. A change in licensing regulations only helped, making licenses available for a nominal fee.
Gambling, which was banned during Soviet times, has long been a part of Russian life.
The last attempt here to legislate morality provides a less-than-successful model. Mikhail S. Gorbachev’s draconian anti-drinking campaign, launched in 1985, decreased alcohol consumption, but at a price: It devastated the nation’s economy and led to the creation of an underground criminal market.
Critics of the gambling bill predict that outlawing gambling in all but four zones will have similar results. "It will open the doors to illegal casinos all over," said Michael Boettcher, a former blackjack dealer who is now CEO of Storm International, which employs 6,000 people at seven casinos in Russia, including Shangri La.
Regions from the balmy Russian south, on the Black Sea, to Kamchatka in the Far East already have expressed a desire to be counted in. Seemingly overlooking Putin’s point, Yevgeny Gerasimov, chairman of the Moscow City Duma’s culture committee, has proposed that the capital itself be named a zone.
He suggests that casinos here - of which there are about 60, including another Storm-owned casino called New York, - relocate to a self-contained area on the city’s southeast side.
Nagatinskaya Poima, on the Moscow River, is far from the center, which he says will deter the most vulnerable, such as youths and pensioners, from visiting in an attempt to "awaken the volcano of luck." But the area hardly seems like Vegas material: It’s industrial, polluted and unscenic as can be.
"If the rich have a need - a weakness - to play roulette, then let them gamble here, and not in other places, not abroad," said Gerasimov, using a common argument that envisions so-called New Russians taking their high-roller bets to Monaco or elsewhere. "The taxes could be used for social programs in the city."
Last Friday, Putin urged Duma members from the ruling United Russia party not to soften the bill and to pass it unchanged by the end of the year. Anatoly Aksakov, one of the party’s deputies, author of an amendment limiting the legal rights of reckless gamblers, will support it. He admits, though, that he’ll miss the bright lights of the city’s casinos, which starkly contrast with the drab, colorless storefronts of Soviet times.