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Russian Gambling Update

Russian gambling operators who have been trying to find workarounds for the draconian anti-gambling measures introduced last month by the government  are coming under increasing pressure to close shop, with extensive police raids in major cities now common.
 
The St Petersburg Times reported this week that the city’s police arrested the owner of an illegal gambling venue and detained another owner as they continued to target illegal gambling spots following a Kremlin order restricting gambling to four remote and undeveloped areas of the vast country.

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Police reported that some operators have attempted to disguise their venues as lottery centres. In St Petersburg, the city police have confiscated more than 3 300 pieces of gambling equipment from illegally operating venues during the past week alone, and at least 500 venues were raided last week, resulting in four criminal cases and 10 administrative cases.
 
The newspaper reports that: "Russian law on lotteries is at present full of loopholes and so vague that it does not even contain a consistent description of what constitutes lottery facilities. Some businessmen are using this lack of legal clarity to their short-term advantage, classifying slot-machines and other facilities as lottery systems."
 
However, the police have warned that they will continue to crack down on illegal gambling venues on a regular basis until the situation on the gambling market becomes stable.
 
Stability may not come for months, however, as governors of the territories set aside by central government as permissible gambling areas have admitted that they are not ready to receive investors and would have to rely heavily on state support to bring infrastructures up to developmental requirements.
 
Deputy Finance Minister Sergei Shatalov said the allocated zones are not yet ready to receive an avalanche of gamblers and gambling businesses. They are suffering from the economic crisis, and there is no infrastructure in these areas to facilitate the smooth transfer of hundreds of casinos.
 
Critics of the gambling reform process speculate that the law will only result in a massive boost of illegally operating private gambling houses. Dmitry Nevelsky, head of the St. Petersburg Association of Gambling Businesses, said few businesses will risk relocation during the instability of the crisis, nor would they find it worthwhile investing far from their hometowns.

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Nevelsky added that owners of gambling businesses in Russia have found themselves at a loss as to where to turn to keep their casinos afloat.
 
“The European market is tightly packed and the chances for Russian businesses to squeeze themselves in are less than scarce,” said Nevelsky. “Nearby Belarus is not an option either, because the moods of the country’s leader are unpredictable.”
 
It is further argued that few Russians will want to travel to gambling zones remote from the main centres of population, and are therefore more likely to seek out a local underground venue.



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