Russia shuts down thousands of casinos

Russia Casinos
Michael Boettcher, the British founder of casino group Storm International, owned this and several other Moscow casinos that have had to close.Alexander Zemlianichenko / AP
/ Source: The Associated Press

Thousands of casinos, slot-machine parlors and betting halls across Russia shut down Wednesday, complying with sweeping new restrictions that require all gambling business to relocate to four remote regions of the country.

The law, which went into effect at midnight Wednesday, was estimated to put more than 400,000 people out of work at a time when Russia's economic crisis is deepening and unemployment is rising.

Russian TV said more than 40,000 workers were affected in Moscow alone, at 30 major casinos and some 500 smaller-scale gaming halls and slot-machine parlors. Russian news agencies reported that Moscow police were checking gambling halls across the capital to make sure they were closing.

Gambling confined to remote areas
The law, passed three years ago at then-President Vladimir Putin's initiative, confines gambling to four special zones in far-flung regions of Russia, most thousands of miles away from Moscow.

Despite widely publicized complaints by elected officials about the bane of gambling, it's unclear how much support the restrictions have among regular Russians.

Officials at some of the businesses said they would reopen as market research companies, or would rent out their valuable, often centrally located real estate.

Still other businesses were trying to skirt the law by retooling themselves as poker clubs — arguing that should be considered a "game of chance" — or as places for Internet gambling, where patrons place bets but computer servers are located offsite at the distant gaming zones.

Moscow Mayor Yury Luzhkov has criticized such efforts to circumvent the law.

"When you sit at casino and you play poker or preference, it's a casino .... but when you play poker at a poker club, it's considered a sport?" he said.

Preference is a card game similar to bridge that was hugely popular in pre-Revolutionary Russia and remains widespread today.

Weeding out criminals
When lawmakers signed the casino closure law in 2006, the move backed the image Putin wanted to project: that of a clean-living, workaholic president. But analysts say the government also saw a chance to weed out a criminal element involved in the casino business.

But many experts say the law will just drive gambling underground, and criminalize it even more than it already was.

An entrance to a casino is seen in downtown Moscow, Monday, June 29, 2009. Russian gamblers are placing their final bets before casinos close down for good in Moscow and other big cities. A new law that comes into effect Wednesday says gambling must now be confined to four far-flung special zones. Alexander Zemlianichenko / AP

Under the new law, casinos and slot machines will be allowed to operate only in Kaliningrad on the Baltic Sea; the Primorsky region on the Pacific coast; the mountainous Altai region in Siberia; and near the southern cities of Krasnodar and Rostov, host to the 2014 Sochi Olympics.

But construction at most of the sites is still in its early stages, meaning it will be months or years before major legal gambling resumes in Russia.

The lack of progress was painfully evident Wednesday at the southern Russian zone, straddling the regions of Krasnodar and Rostov on the Azov Sea.

There, authorities have alloted a coastal stretch of land to a complex named Azov-City, an ambitious project of casinos and slot machine parlours that is currently little more than a construction site.

Krasnodar region governor Alexander Tkachyov attended a humble ceremony marking the gambling zone's first day, and used the occasion to call for investors to plow their cash into the region.

A token roulette wheel and a couple of poker tables were set up in a marquee adjacent to the construction site to greet the new law.