Industry News
Russia Moves to Create Las Vegas Style Cities in its Rural Provinces
But now, Russian politicians are seeking to relocate most of the gaming facilities to Las Vegas or Atlantic City-style locales, in its rural west, hoping to create a tourist attraction for the rest of the world, not just Russian citizens.
A new bill approved this week by Russia's lower house of parliament, the Duma, gamblers will have only two more years to place their bets in Russia's major cities. After that, all casinos will be relocated to four other regions distant from Moscow, where there is scant economic growth, and the government is looking to stimulate development.
According to Yevgeny Kovtun, vice president of the Association of Gambling Businesses, which unites about 30 gaming companies, the industry is going through a transition there, much like when the gambling entrepreneurs of Havana relocated to Las Vegas during the last century.
Neon-lighted casinos sprouted in big Russian cities in recent years. The exterior of one casino in Moscow looks like a ship, and some other casinos offer prizes of luxury cars or $1 million in cash. Slot-machine halls have appeared throughout the country.
Russia's oil-driven economic upswing of recent years sent cash to the casinos. According to Vladimir Medinsky, deputy chairman of the parliament committee that drafted the legislation, gambling is "natural" but should be "controlled" by the government. This is somewhat akin to the argument that American online casino owners made when trying to defeat the anti-Internet casino ban in the U.S. Congress.
The restrictions will compel many gamblers to get on a plane and fly to the taiga -- the forest region -- to make a bet in the future.
''In the U.S. people know about Las Vegas from childhood, but in Russia gambling tourism doesn't exist,'' Kovtun said. ``The gaming companies will have to entice them to the Pacific coast.''
The four proposed gambling zones, which are currently infrastructure-free wilderness, are located in the Altai region in Siberia, the Pacific coast region of Primorsky, the Kaliningrad area along the Baltic coast, and an area in Russia's south between Rostov and Krasnodar.
Some Exemptions
There are some exemptions for very successful casinos, however. Those with assets worth more than $23 million will be allowed to continue operations in Moscow and St. Petersburg.There is some concern, however, that the regulations may backfire. The gambling market in Russia is already cooling down. The volume of gaming equipment sold has shrunk by 20 percent this, after growing by more than 100 percent some years.
But the government scoffed at the idea that the industry is faltering.
''You have to be blind to say that the market is shrinking,'' Kovtun said. ``I'm driving past the Havana cinema right now. Once there was a movie hall here, now half the building has been taken over by a casino.''
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