Russia’s casinos fear for the future as relocation deadline approaches

Posted on | November 27, 2008 |

A government initiative to relocate Russia’s gambling industry to four zones scattered across the country seems increasingly likely to stagnate. Industry leaders complain that investment in infrastructure for the move has not been forthcoming and say they fear that any transfer to the regions will end up with them footing the bill.

Hanging over them is a pledge by Moscow to ban betting everywhere except for the designated zones from July 1, 2008. That, claim the casino owners, will throw thousands of people out of work in one of the few industries currently unaffected by the global economic slowdown.

The four special zones, Kaliningrad, Siberia’s Altai region, the Far East and on the southern Sea of Azov, were defined in a law drawn up in 2006. Industry leaders say three zones have already fallen at the first fence because areas within have not been defined, are too remote or the necessary infrastructure is underdeveloped.

The only zone with any chance of meeting the deadline straddles the Rostov and Krasnodar regions in Azov known as Azov City but even there foreign investment is showing signs of drying up.

Martin Himmelbauer, a spokesman for Casinos Austria, which has 79 casinos in 18 countries, told the Moscow News: “As far as I know, there are hardly even streets to go there. How is it to be finished by July of next year?”

In April, Casinos Austria representatives met Rostov Governor Vladimir Chub to discuss Azov City. Regional officials said they had relaxed rules so that investors only had begin construction by next summer, not complete it. Even so, while Casinos Austria said it would still be interested in developing a site, plans to let others pave the way.

A site in the Far East has not yet even been identified while local political scuffles have held up development in Kaliningrad. Altai, more than 3,000km from Moscow in southern Siberia is, say the casino companies, simply too far away.

Russia’s gambling industry brings in $8bn (£5.2bn) per year and employs half a million staff. Ultimately their jobs may rest on a change of heart in the Duma. In the summer a bill that would have pushed back the proposed change by three years was introduced by a senior official of the ruling party. However, it found little support and was quickly retracted.

Bookmark It