Sochi and Crimea Pegged as Future Gambling Zones
Published: July 5, 2014 (Issue # 1818)
The State Duma passed a new law Friday bringing Crimea and, in a surprise move, post-Olympic resort town Sochi into the select group of Russian regions and territories that are allowed to establish gambling zones.
"The creation of a gambling zone in the Republic of Crimea will help attract additional investment in the region, create new jobs and replenish the revenue base of the regional budget," said Anatoly Karpov, first deputy chairman of the Duma's Economic Policy, Innovation Development and Entrepreneurship Committee, ITAR-Tass reported.
The Russian government essentially outlawed gambling in 2009, restricting it to four designated zones throughout Russia, but only one, the Azov-City gambling complex on the border of the Krasnodar and Rostov regions, has taken brought its special privilege to fruition. Similar zones in the Kaliningrad region, Primorye region and the republic of Altai are still under construction five years on.
In a surprise move, legislators inserted a clause into the bill during its second reading that allows for the creation of gambling facilities in Sochi, the venue for the Winter Olympic Games earlier this year. The bill stipulates, however, that gambling venues can only be established in Olympic facilities that were bank-rolled by private investors.
Proposals to turn Sochi into a Russian Las Vegas were floated by Sberbank chief German Gref this past winter at a meeting with Prime Minister Dmitry Medvedev, but Medvedev at the time did not support the initiative, Vedomosti reported, citing individuals present at the meeting.
While the government has placed restrictions on where gambling zones can be established in Sochi, the bill gives Crimean authorities full jurisdiction over defining the location and boundaries of gambling areas.
Analysts suggest Crimea's budget could get a 25 billion ruble ($725 million) boost annually by establishing a gambling zone, Itar-Tass quoted Karpov as saying.
"You can expect an increase in the flow of tourists to the region, the development of the hotel business and food service," Karpov said.