On the Border of Kazakhstan — Dreams of Vegas
Las Vegas in Siberia?
For about 13 billion rubles, a mere US$480 million, it could happen, or so say
officials of Altai Territory, a 168,000-square-kilometer chunk of south-central Russia on
the Kazakh border.
A sparsely populated land of steppes, rolling mountains, lakes and rivers, farms and
mines, with 2.6 million people, about 15 inhabitants per square kilometer, Altai is
designated one of four zones where Russia's casinos will have to emigrate when a new
law banishing the industry from the country's major population centers takes effect in two
years.
Altai's Economic and Investment Department has unveiled a plan for an expansive
resort complex of 50 to 100 square kilometers encompassing casinos, hotels, restaurants,
ski slopes, tennis courts and recreation facilities near a village called Solnovka, which
lies between the Biryuzovaya Katun special economic zone and the holiday town of
Belokurikha at the foothills of the Altai Mountains, popular for its mineral springs.
A road will be laid connecting the proposed gambling center to Biysk Airport, the
department said.
"A whole new city will be built on the hitherto vacant lot," Mikhail Shchetinin, who
heads the Economic and Investment Department, told Itar-Tass news agency. "Gamers
will come to us not only from Russian regions but also from near and far abroad. The
gamers will come here, the same as people from all over the world visit Las Vegas."
Yevgeny Kovtun, vice president of the Association of Gambling Businesses, a trade group representing 30 operators, is skeptical. Russian gambling is almost exclusively
"locals" gambling, and it is suspected that few city dwellers will board a plane or train to
journey across several time zones to Siberian taiga to place a bet. "In the U.S. people
know about Las Vegas from childhood," Kovtun said, "but in Russia gambling tourism
doesn't exist."
This of course is the problem with the zones law, which, say industry advocates like
Kovtun, amounts to an effective demolition of legalized casino gambling in Russia. The
good news, if it can be called such, is that President Vladimir Putin, who pushed the
measure through to easy passage in the Russian parliament, will be out of office by the
time it takes effect on July 1, 2009. So the industry may yet save at least some of the
scores of glittering gambling palaces in Moscow and St. Petersburg that have spurred
Russia's growth over the last decade into a $5 billion-plus market.
But the clock is ticking. Police have shut down several big city casinos they say were
linked to Georgian mafia, and Moscow officials have all but completed a purge of the
capital's stand-alone slot machine industry, which mushroomed in the form of arcades on
nearly every street corner during the years when the industry was growing by leaps and
bounds in the absence of any government regulation. More than 1,900 slot operations
have been closed to date, about 70 percent of the city's total.
The new law also states that, as of this July, only casinos larger than 800 square meters
and arcades larger than 100 square meters will be licensed. Operators also will have to
show net assets greater than 600 million rubles ($22.5 million) to qualify and they must
offer at least 10 table games and 50 slots.
In the new zones, only Russian-owned companies meeting these criteria will be granted
permits, and permits will be good only for five years, at least initially.
Two of these zones are in European Russia: Kaliningrad Region on the Baltic Sea
between Poland and Lithuania, which contains a population of about 930,000 and is
separated from Russia proper by eastern Poland; and an area north of the Caucasus
bordering the Rostov Region and Krasnodar Territory on the Sea of Azov.
The fourth zone is Primorsky Territory in the Far East between Manchuria, North
Korea and the Sea of Japan. This mostly mountainous, sparsely populated area, whose
principal city is Vladivostok, contains about 2.2 million inhabitants spread across
166,000 square kilometers, 12 people per square kilometer. Eighty percent of it is forest
where tigers still roam. About the best that can be said of it from an industry perspective
is that its proximity to China could make it attractive to that country's gambling masses.
— James Rutherford
IGWB