New legislation will push casinos out of the country's big cities and into four remote regions that now are essentially wilderness.
MOSCOW — Garish or goofy or grim, Russia’s casinos and slot-machine halls are some of the most vivid testimony to communism’s collapse.
But, under legislation approved Wednesday by Russia’s lower house of parliament, the $6 billion industry is to be driven out of Moscow, St. Petersburg and most of the rest of Russia.
Once the bill is signed into law, gamblers will have only until mid-2009 to lay their bets in Russia’s major cities. After that they’ll have to go to a remote part of Siberia or three other regions distant from Moscow.
“These are repressive measures — essentially they amount to a ban,” said Yevgeny Kovtun, vice president of the Association of Gambling Businesses, which unites about 30 gaming companies.
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With the exception of a drab national lottery, Soviet citizens had no outlet for their speculative urges. That changed with the chaotic arrival of capitalism: Neon-decked casinos sprouted in big cities, some offering prizes of luxury cars or $1 million in cash. Slot-machine halls have appeared throughout the country, sometimes even next to schools.
Russia’s oil-driven economic upswing of recent years sent new cash to the gaming tables. But a public backlash has grown.
“This is a business based on vice. It brings no good,” said Vladimir Medinsky, deputy chairman of the parliament committee that drafted the legislation.
“It hasn’t been banned altogether, because it is a natural vice and should therefore be controlled,” he said.
The zones, which are currently infrastructure-free wilderness, are in the Altai region in Siberia, the rainy Pacific coast region of Primorsky, the Kaliningrad area along the Baltic coast and an area in Russia’s south between Rostov and Krasnodar.
Industry players say that while limitations are needed, a complete ban except for the gaming zones is harsh and could kill the industry. The restrictions, they say, assume Russians will be ready to jump on a plane and fly to the taiga — the sub-Arctic forest region — to make a bet.
“In the U.S. people know about Las Vegas from childhood, but in Russia gambling tourism doesn’t exist,” Kovtun said. “Before, a person would pop into a casino or slot-machine hall between the metro and his house. Now … the gaming companies will have to entice him to the Pacific coast.”
Under the new legislation, no new gambling institutions will be allowed to open as of the new year, and by summer only those with assets worth more than $23 million will be allowed to continue working, killing off smaller operations.
Dr. Zurab Illiich Kekelidze, deputy director of the Serbsky Center for Social and Forensic Psychiatry, said citizens of the former Soviet Union are more vulnerable to gambling’s pull.
“They have no psychological immunity to casinos and to slot machines, because in Soviet times they didn’t exist,” said Kekelidze, who treats patients with pathological gambling dependency.
While Kekelidze welcomed the creation of gambling zones, he said efforts should be made to educate people about gambling and provide better treatment and counseling for addicts. Otherwise the gaming zones could act as “levers of psychological instability,” in poor regions like Kaliningrad, he said.
Lavrentii Gubin, a spokesman for Storm International, which runs six casinos and 26 slot-machine halls across the country, warns that only big gaming companies will survive the tough new rules, allowing illegal gambling to flourish.
Although the government has said it is willing to allocate billions of dollars to build infrastructure, “so far not a single company has said it is interested in the project,” Gubin said.
While the bill appears to sound a death knell for most gambling establishments, Russians who want to bet still have outlets. Russian news agencies reporting on the casino bill noted that one venue for risk-taking won’t be closed — the stock exchanges.