No more online gambling for russia
21.12.2006The burgeoning online gambling market could be slowed down by a bill passed this week in the State Duma, the lower parliament of Russia. If the Federation Council and President Vladimir Putin sign it off, a highly likely outcome as the latter proposed it, the bill will become law.
The Bill creates four gambling zones in the country, outlaws online gambling and online poker, and sets the minimum gambling age at 18 years. Its purpose is to restrict the uncontrolled spread of gambling outlets throughout Russia.
After July 1 2009, any gaming facility operating outside of the four approved gambling zones will be banned. The State began the crackdown on gambling when President Vladimir Putin ordered lawmakers and the Cabinet to put an end to it, especially in large urban centres, last year.
On October 6 this year the president asked the Duma for four gaming zones. The Duma approved the bill in its first reading, but the did not specify the location of the zones. Following intense debate and not a little controversy, the Duma's Economic Policy, Entrepreneurship and Tourism Committee defined the location of the zones when the bill was formally presented and approved on December 15 for its second reading.
The zones are well away from the main urban centres of Russia: the Altai Territory (southwest Siberia), Primorye (Far East), the Kaliningrad Region (Russia"s exclave on the Baltic Sea), and on the border of the Rostov Region and the Krasnodar Territory in the south of the country.
Duma Deputy Alexander Lebedev explained that the committee took into account which regions would attract the most foreign tourists, and the distance of regions from Moscow to take the pastime away from this area. No gambling in Moscow could wreak dramatic change, closing high-profile nightspots like the Golden Palace and the numerous slot machine parlors that have proliferated everywhere in the city, including metro stations, beneath underpasses and ground floors of many apartment buildings.
Contrary opinions on the choice of the four gaming zones continue to surface, with Primorsk the most understood.
"The Chinese will gamble in the Primorsk region, where the casinos are already living off the Chinese," said Samoil Binder, deputy managing director of the Association for the Development of the Gaming Business. "But you've got to be kidding yourself if you think you'll find someone to sink US$ 100 million to US$ 1 billion in some hypothetical hope that some day people would want to come gamble there."
Yevgeny Kovtun, a spokesman for the Gaming Business Association, more or less agreed with Binder. "With the exception of the Primorsk region, the locations of the other zones don't make any economic sense." Muscovite gamblers were more likely to fly to Riga or Kiev, capital cities where casinos are established, Binder said.
Another contentious point in the gambling bill is the high asset levels that casino owners must prove. Gambling companies have to be Russian, and must have not less than 600 million rubles in assets (about US$22.4 million or GBP 11 million) as of June 1, 2007.
The bill also bans any gambling establishments from locating in apartment buildings, street kiosks, childcare centers, educational or healthcare institutions, railway terminals, airports, seaports, public transport, passenger lounges and waiting areas, sports facilities, state and government agencies, or religious organizations.
All gambling businesses that fail to meet the requirements proposed in the bill will be shut down after July 1, 2007. Any that meet the requirements will be allowed to operate without special permits until January 1, 2009, when the new law comes into effect.
