Russian Lower House of Parliament backs gambling zones
Russia’s lower house of parliament on Friday backed sweeping gambling legislation force casinos across the country to relocate into four designated zones. The State Duma voted 425-0 on a key second reading to pass the Kremlin-backed legislation, which would set up the four special regions by July 1, 2009.
When the bill become law, the casino lights would go out in Moscow, St. Petersburg and other areas not slated for gambling on June 30, 2009.
All that remains for the bill to become law -establishing gambling areas in the Altai, Primorsk and Kaliningrad regions, and an area between the Rostov and Krasnodar regions- is a third reading, widely considered perfunctory, the Federation Council’s support, and the signature of President Vladimir Putin, who submitted the bill in October.
Should the bill become law, the casino lights would go out in Moscow, St. Petersburg and other areas not slated for gambling on June 30, 2009.
The end of gambling in the capital would mark a seismic shift in post-Soviet Moscow’s landscape - shuttering high-profile nightspots like the Golden Palace and numerous slot machines tucked beneath underpasses, next to metro stations and even on the first floor of many apartment buildings.
Duma Deputy Alexander Lebedev of United Russia offered mixed reviews, saying in an interview that the gambling zones "were chosen behind closed doors, which is not great. But it’s better than the alternative."
The location of the gambling zones was the most controversial part of the bill. The first reading of the measure, which passed last month, did not specify the locations, leaving that up to the executive branch.
Another key provision in the gambling measure requires casinos and slot halls to have nearly us$ 23 million in assets as of June 1, 2007.
Lebedev, a staunch gambling opponent, said executive branch officials from many agencies had told him that they did not want to bear the burden of choosing the zones’ locations. "This fear had the potential to delay the passage of the law," he said.
Surprisingly, it was the Duma’s Economic Policy, Entrepreneurship and Tourism Committee that defined the zones when it formally presented the bill Friday for the second reading.
All four regions selected were among those that had voiced an interest in housing casinos, Lebedev said. He added that the committee took into account which regions would attract the most foreign tourists and the distance of regions from Moscow; legislators did not want gambling halls near Moscow. Many questions about the selection process were left unanswered, Lebedev said.
Industry experts called Primorsk a good choice for casinos but voiced doubts about the other gambling zones. "The Chinese will gamble in the Primorsk region, where the casinos are already living off the Chinese," said Samoil Binder, deputy managing director of the Association for the Development of the Gaming Business. "But you’ve got to be kidding yourself if you think you’ll find someone to sink us$ 100 million to us$ 1 billion in some hypothetical hope that some day people would want to come gamble there."
Yevgeny Kovtun, a spokesman for the Gaming Business Association, more or less agreed with Binder. "With the exception of the Primorsk region, the locations of the other zones don’t make any economic sense." Moscow’s gambling class would rather fly to Riga or Kiev, capital cities where casinos are established, Binder said.
Regional authorities would be expected to determine the exact size and location of the gambling zones, which must fall outside residential areas, a copy of the law obtained by The Moscow Times said.
In the long run, the new zones would benefit the four regions, but developing a regulated gambling industry would take some time, said Alexei Titkov, senior analyst at the Institute for Regional Policy. One problem Titkov identified is that Russians are less mobile than Europeans and Americans.
Also, Russia’s tourism infrastructure is undeveloped, Titkov said. For many, traversing a vast and poorly paved country is either too inconvenient or too expensive, he said, adding that illegal gambling dens were likely to sprout after the ban took effect.
Titkov said local residents in the relatively conservative Altai, Rostov and Krasnodar regions also may have some qualms about living near casinos, which the Orthodox Church and others have called immoral.
The Altai, Krasnodar and Kaliningrad regions are also among seven designated tourism zones, which were created to speed construction of roads, hotels and other facilities critical to luring tourists.
The tourism zones come into effect in early 2008, Economic Development and Trade Minister German Gref said earlier this month. The gambling measure exempts Russia’s stock exchanges and lottery operators.
The Moscow Times