Friday, December 22, 2006

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. 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.