The 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 centers, 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 centers 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.