Gambling Zones Expanded Into New Russian Territory

Vladimir Putin signs law allowing gambling in both the former Olympic host city of Sochi and the newly annexed peninsula of Crimea.

Although online poker sites in Russia continue to operate in what has become a rather unexplored grey area of the law concerning games of skill, the more traditional forms of gambling are much better policed and far more restricted. The 2009 laws that saw all gambling restricted to but four disparate regions of Russia was seen as a bold move by the Putin administration in response to what had been a fair bit of a free for all.

Moscow alone, by 2002, had 58 casinos, 2,000 gaming rooms and over 70,000 slot machines, which seemed a little excessive for a city of just over 11 million people, but may well have been acceptable had the gambling establishments paid their way in taxes. Alas the corruption and money laundering rife in the industry was accompanied by a fair degree of tax evasion so when the state stepped in, few voiced opposition.

The four regions selected were spread out from Kaliningrad on the Baltic to Primorsky Krai on the Pacific rim, taking in Altai Krai in south western Siberia and Krasnodar Krai on the corner of the Black Sea. With the first and last predominantly aimed at the Russian market the others were tactically placed to take advantage of the growth Chinese gambling tourism.

Altai Krai sits on the border of Kazakhstan a mere hop skip and a jump from the western regions of China and Primorsky Krai sits alongside the eastern border of the Heilongjiang and Jilin provinces making it ideally accessible to the huge Chinese gambling public. Success has been patchy however, and now recent events far from China have added an interesting alternative into the mix.

Crimea gets gambling

Making Gambling Attractive In Russia

• Visa free travel for Chinese tourists
• Great gambling news for travelers
• Gambling zones need infrastructure

The crisis in Ukraine and economic fallout therefrom still dominates the headlines with the shooting down of flight MH17 just the most recent in a series of lamentable events that all kicked off with the annexation of Crimea by Russian forces. The imposition of sanctions by the EU, America and its allies, and possible retaliatory economic measures by the Russian energy industry, likely to continue in significance for some time to come.

Meanwhile the Crimea, almost entirely forgotten now by the western media, is facing a gamble on an uncertain future, with many of its pensioners and military personnel relying on state payments. Luckily Mr Putin has plans for the region and signed into law a bill that permitted Crimea to join the gambling zone that is Krasnodar Krai just next door. This, it is hoped, will provide investment opportunities and economic rejuvenation.

Not that everyone agrees with this change to the strict gambling laws in Russia. Whilst some have compared the stand off between east and west currently raging across the Ukraine as akin to a return in time to the cold war, in Russia it’s the communists voicing opposition to Mr Putin’s plans. Mr. Nikolai Kolomoitsev, senior Communist MP railed against the bill in what was a symbolic gesture to the history of Crimea as a holiday destination for families.

“The gaming business will stimulate nothing but banditry and debauchery,” he said in the parliamentary debate earlier this month, “we cannot vote for such laws.” and his party didn’t. Mr. Kolomoitsev suggested instead Crimea tend to its vineyards and grew peaches saying “That’s when Crimeans will be glad to return to their Motherland.” which is neatly demonstrates why the communists aren’t in power anymore.

Peaches and vineyards

Whether the expansion of the gambling zone will really be in the long term interests of Crimea remains to be seen but Deputy Governor Rustam Temirgaliyev has made it clear he believes it will. “The gambling zone should become a sort of engine for the Crimean economy.” he said, “We have ambitious plans, we are counting on our gambling zone becoming a direct competitor to Macao, Monaco, and Las Vegas.” Which may well be a triumph of optimism and chicken counting over common sense.

But it is not just from these established centers of gambling and internet betting in Russia that Crimea will face competition. The same bill that allows them to set up casinos on the Crimea peninsula also allows the introduction of gambling into the former Winter Olympics host city of Sochi. Investors in the facilities and infrastructure that staged the games welcoming this move as a possible way to see some return on what is, thus far, a loss maker.

The significance in this is perhaps overshadowed by Crimea’s new status, but it should be noted that as recently as February Mr. Putin was a critic of allowing gambling in Sochi. He even said that he felt a gambling culture being introduced would “make it hard for people to vacation there as a family with children.” adding “I think that would be a shame.” but in the months since then economic realities have hit home and somewhere along the line Mr. Putin changed his mind.

One might be entirely diffident to the opening of a Sochi casino or the Crimeans being given the right to gamble where their own regional parliament sees fit, you might even chuckle a little at the idea Chinese gamblers will be offered visa-free travel to the region, which they will. However the concept that Vladimir Putin can be made to change his mind by economic reality is something that none of us should overlook at this time in this place.

Read more about Putin’s gamble on the future and the future of gambling under Putin.