Gambling News by House of Odds

In post-Soviet Moscow, hundreds of neon-spangled casinos and slot-machine
halls illuminate a city once dominated by Stalin-era skyscrapers and
golden-domed Orthodox Churches. Under the proposed law, the gambling halls
would be shut down by 2009. Casinos would be allowed only in four gambling
zones located in less populated areas of the country, including two zones in
European Russia, one in Siberia and one in the Russian Far East. The Kremlin
has yet to name the specific zones. Kaliningrad, a Russian enclave tucked
between Poland and Lithuania, the Black Sea resort of Sochi and the Siberian
region of Lake Baikal are a few of the areas being proposed. Gambling
industry officials say the sweeping legislation would cripple a
$6-billion-a-year business. In Moscow alone, there are 540 gambling
businesses, from large casinos to small slot machine halls tucked along
alleys. Creating the four zones would require significant investment and
time in a country where red tape and overwhelming bureaucracy often stall
business projects. Many gambling industry executives say the two-year
deadline to close casinos in the cities and rebuild them elsewhere would be
impossible to meet given Russia's underdeveloped hospitality industry,
dilapidated roads and Soviet-era airports outside of the large cities. "It
certainly took more than one or two years for (Las Vegas) to develop," said
Yevgeny Kovtun, vice president of the Gambling Business Operators
Association. Even if the federal government provided incentives for
investors, building the Vegas-styled zones "will require at least 10 years,"
he said. Supporters of the bill say the proposed zones are necessary to
protect the Russians from the evils of gambling. In October, President
Vladimir Putin likened gambling to "the spread of alcoholism." Lawmakers
also accuse the gambling industry of taking advantage of poor Russians.
"Lonely mothers, low-paid workers and people who see no future for
themselves - these are the victims we are obliged to protect from the vices
of gambling because they are trapped by huge advertising," said Alexander
Lebedev, a parliament member and billionaire businessman who has lobbied for
gambling reform for several years. "Those in the gambling business are
highly unethical. I think gambling is not a normal business and is certainly
one that we don't require in this society."

In Soviet times, gambling was outlawed, seen as a capitalist vice in which
only the greedy indulged.

But 15 years after the fall of communism and with a rising economy, Russia
has provided fertile ground for the gaming industry. Slack regulations and
licensing fees of less than $20 made it easy for just about any entrepreneur
to install a slot machine in a corner grocer or kiosk. By the late 1990s,
gambling had become a hobby of both the elite, who visit the top-notch
Moscow casinos, and the working class, who can easily slip into a
neighborhood slot machine hall.

The gaming industry contributes about $1 billion of tax revenue each year to
the Russian government.

Casino owners say they have been calling for a change in the unregulated
gaming industry for years. Higher license fees and a gaming commission to
oversee regulations would better serve the industry and be more feasible
than forcing all casinos to relocate to remote areas of the country, they
argue.

The proposed zones will be "like going from one extreme to the other," said
Michael Boettcher, an Englishman and former blackjack dealer who moved to
Moscow in 1992 and now runs some of the city's top casinos. His company,
Storm, also manages Moscow's popular slot machine hall chain, Super Slots.

"The federal government just came in and let the hammer drop instead of
listening to what we had been suggesting for years," he said.

Lebedev and other lawmakers say they expect the bill to pass before the end
of the year.

Opinion polls show support for the proposed law. In an October survey
conducted by the All-Russian Opinion Poll Center, 65 percent said they were
in favor of removing casinos from city centers and relocating them to
special zones.

For gamblers such as Artur Luzin, 24, a waiter who frequents the tables and
slot machines of the Golden Peacock Casino in central Moscow, closing the
city's casinos will be a disappointment.

"These places make the city an attractive place to visit for young people
like me," he said. "I agree that they should close down the smaller, seedier
places. But let us spend our money they way we want."

In post-Soviet Moscow, hundreds of neon-spangled casinos and slot-machine
halls illuminate a city once dominated by Stalin-era skyscrapers and
golden-domed Orthodox Churches. Under the proposed law, the gambling halls
would be shut down by 2009.

Casinos would be allowed only in four gambling zones located in less
populated areas of the country, including two zones in European Russia, one
in Siberia and one in the Russian Far East.

The Kremlin has yet to name the specific zones. Kaliningrad, a Russian
enclave tucked between Poland and Lithuania, the Black Sea resort of Sochi
and the Siberian region of Lake Baikal are a few of the areas being
proposed.

Gambling industry officials say the sweeping legislation would cripple a
$6-billion-a-year business. In Moscow alone, there are 540 gambling
businesses, from large casinos to small slot machine halls tucked along
alleys.

Creating the four zones would require significant investment and time in a
country where red tape and overwhelming bureaucracy often stall business
projects. Many gambling industry executives say the two-year deadline to
close casinos in the cities and rebuild them elsewhere would be impossible
to meet given Russia's underdeveloped hospitality industry, dilapidated
roads and Soviet-era airports outside of the large cities.

"It certainly took more than one or two years for (Las Vegas) to develop,"
said Yevgeny Kovtun, vice president of the Gambling Business Operators
Association. Even if the federal government provided incentives for
investors, building the Vegas-styled zones "will require at least 10 years,"
he said.

Supporters of the bill say the proposed zones are necessary to protect the
Russians from the evils of gambling. In October, President Vladimir Putin
likened gambling to "the spread of alcoholism."

Lawmakers also accuse the gambling industry of taking advantage of poor
Russians.

"Lonely mothers, low-paid workers and people who see no future for
themselves - these are the victims we are obliged to protect from the vices
of gambling because they are trapped by huge advertising," said Alexander
Lebedev, a parliament member and billionaire businessman who has lobbied for
gambling reform for several years. "Those in the gambling business are
highly unethical. I think gambling is not a normal business and is certainly
one that we don't require in this society."

In Soviet times, gambling was outlawed, seen as a capitalist vice in which
only the greedy indulged.

But 15 years after the fall of communism and with a rising economy, Russia
has provided fertile ground for the gaming industry. Slack regulations and
licensing fees of less than $20 made it easy for just about any entrepreneur
to install a slot machine in a corner grocer or kiosk. By the late 1990s,
gambling had become a hobby of both the elite, who visit the top-notch
Moscow casinos, and the working class, who can easily slip into a
neighborhood slot machine hall.

The gaming industry contributes about $1 billion of tax revenue each year to
the Russian government.

Casino owners say they have been calling for a change in the unregulated
gaming industry for years. Higher license fees and a gaming commission to
oversee regulations would better serve the industry and be more feasible
than forcing all casinos to relocate to remote areas of the country, they
argue.

The proposed zones will be "like going from one extreme to the other," said
Michael Boettcher, an Englishman and former blackjack dealer who moved to
Moscow in 1992 and now runs some of the city's top casinos. His company,
Storm, also manages Moscow's popular slot machine hall chain, Super Slots.

"The federal government just came in and let the hammer drop instead of
listening to what we had been suggesting for years," he said.

Lebedev and other lawmakers say they expect the bill to pass before the end
of the year.

Opinion polls show support for the proposed law. In an October survey
conducted by the All-Russian Opinion Poll Center, 65 percent said they were
in favor of removing casinos from city centers and relocating them to
special zones.

For gamblers such as Artur Luzin, 24, a waiter who frequents the tables and
slot machines of the Golden Peacock Casino in central Moscow, closing the
city's casinos will be a disappointment.

"These places make the city an attractive place to visit for young people
like me," he said. "I agree that they should close down the smaller, seedier
places. But let us spend our money they way we want."