Russian new gambling zones need billions for development

The four designated legal gambling zones are in Russian western Kaliningrad exclave; along the Azov Sea in the south; in the Altai region of Siberia; and in the far eastern Primorye region, near North Korea and Japan. But the gaming industry has been reluctant to move there, given the regions' undeveloped infrastructure and difficulty of attracting customers to the far-flung locations.

Despite the 450,000 workers that will lose their jobs in Russia and its economic crisis, in which the country will lose between us$ 1 and us$ 2 billion per year in tax revenue, hundreds of inspectors have taken to the streets to make sure all casinos and gambling areas have closed per government orders.

Police and City Hall officials raided casinos and gaming halls right after midnight Tuesday and continued their checks Wednesday to make sure that Moscow's 513 gambling establishments were closed. Deputy Mayor Sergei Baidakov, who was participating in the crackdown, said 440 of the 513 establishments were checked by 2 a.m., and the remaining 73 would be checked by Wednesday evening.

"The law is indispensable both for authorities and business," Baidakov said while visiting the closed Superslots hall in the Udarnik movie theater, Interfax reported. The police found one slot machine hall on Ultisa Mitinskaya in northwestern Moscow working at 1:25 a.m. and forced it to close, City Hall spokesman Leonid Krutanov said, Interfax reported. The owner could face charges of operating an illegal enterprise, which carries a fine or up to six months in prison.

Baidakov said the authorities were expecting a shadow gambling business to emerge and promised to shut it down.

Under the law, gambling in Moscow has been restricted to lotteries, bookmakers and poker in specially licensed sports clubs. Slot machines and roulette wheels are banished to special zones in the exclave of Kaliningrad, the southern Krasnodar region, the Siberian region of Altai and Primorye in the Far East.

The first zone that will host a casino will be in Krasnodar, RIA-Novosti reported Wednesday. Kazan company Royal Time is planning to build a casino in Azov-City, on the border of the Krasnodar and Rostov regions, by the end of 2009.

Royal Time head Rudolf Metevosyan said the company has rented 4 hectares of land to construct entertainment facilities, including a casino and restaurant, RIA-Novosti reported. He declined to say how much the company plans to invest in the project. "The exact date of the opening hasn't been decided yet," Metevosyan said.

Kaliningrad authorities have decided to put two plots of land up for auction in July to gauge demand, RIA-Novosti reported. The gambling industry has estimated that us$ 40 billion is needed to develop the four gambling zones.