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Roulette wheels fall silent in Russia
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Russia has cracked down on the booming gaming industry, shutting overnight all casinos and gambling halls.
Vladimir Radyuhin
While solving one problem, the sweeping ban on gambling has created new problems in Russia.
Russia has cracked down on the booming gaming industry, shutting overnight all casinos and gambling halls. However, forcing the gambling genie back into the bottle may prove more difficult than letting it out.
Nearly two decades after gambling was officially allowed in post-Soviet Russia, roulette wheels came to a halt on July 1, as a 2006 law that confined gambling to four special zones in far-flung regions went into force. The law was passed when the pu blic outcry against the unrestricted proliferation of roulette wheels and slot machines became too loud for the authorities to ignore. Gambling exploded in Russia after 2002 when regulation was so simplified that anyone who had a spare $50 to buy licence could open multiple facilities. By 2006, gambling revenues quadrupled to nearly $8 billion, the Russian Union of Industrialists and Entrepreneurs estimated. The exact figures were hard to come by as the industry was largely controlled by criminal gangs that paid little, if any, tax, Moscow officials complained.
Before the ban Russia had 3,60,000 slot machines, more than any other country except Japan and the United States, according to the market research firm, Taylor Nelson Sofres. These spread far beyond gaming halls to shops and malls across the country.
Glitzy casinos and dingy slot machine halls became a grisly symbol of new Russian capitalism. The gaming thrill has created about three million gambling addicts in the country, according to the NarcoDen rehabilitation centre in Moscow. The media were full of stories of robberies and murders committed by gamblers desperate to get money to play the roulette or slot machine. This finally spurred the government into action. The ban won the support of 72 per cent of the Russians.
Psychiatrists also welcomed the move. “The gambling addiction destroys individuality,” said Tatyana Dmitriyeva, head of the prestigious Serbsky Psychiatric Institute. She warned, though, that the ban could lead to an influx of psychiatric patients as gambling addicts struggled to find some kind of substitute.
While solving one problem, the sweeping ban has created new problems. It threw about 4,00,000 people out of work in the midst of the economic meltdown just as the unemployment rate in Russia climbed to 10 per cent.
The idea of setting up four special gambling zones in remote regions has so far failed to take off as the government refused to provide any incentive or tax break to attract an estimated $40 billion in investment needed to build Russian Las Vegases. Most big-time operators have moved their casinos abroad, and some are offering incentive package tours for high-rolling gamblers to new locations in Europe. Within two weeks of the ban in Russia, neighbouring Belarus unveiled a plan to set up a large gambling centre next to the international airport in the capital Minsk to lure Russian investors and gamblers.
In Russia itself, gambling refuses to die out. A survey showed that nearly 60 per cent of gambling hall customers would switch to online gambling. Many slot machine parlours are reinventing themselves as poker clubs or lottery halls — two forms of gambling not banned. Some have been remodelled into Internet clubs offering online gambling. The police are on the lookout for illegal establishments but the experience of neighbouring Ukraine, where gambling was banned a week earlier, shows that underground business is even harder to control.
Gaming officials say the government has gone overboard with the all-out ban. The Russian Union of Industrialists and Entrepreneurs called for amending the 2006 law and allowing casinos and slot machines in hotels and tourist establishments, but the appeal was ignored.
President Dmitry Medvedev agreed that the ban created a “vacuum” that “will of course be filled by something,” but ruled out relaxing the law. He likened gambling to drug addiction and made it clear that drugs and alcohol would be the next targets in the government campaign to rid Russians of bad habits.
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