Crimea Casino Prospect Under Putin’s Consideration

Russian president, Vladimir Putin, has proposed an amendment to Russian law allowing for a gambling zone to be established in the Crimean peninsula. This would be Russia’s fifth gambling zone and a huge step forward for gambling investors in the country. Previously, Russia has held fast to the four defined gambling zones in Primorsky Krai, Kaliningrad, Krasnodar, and Altay. They have even gone so far as to temporarily suspend gaming in those zones from time to time, due to Russia’s large and ever increasing gambling addiction. They have also fought hard to keep gambling out of Russia’s more popular cities such as Moscow and Sochi in order to preserve their family friendly atmosphere.

In the newly acquired Crimean territory, Russia plans to stimulate economic growth with a reported $7 billion in stimulus aid. While casinos in the region will have little effect on total growth of the economy, they are a significant step forward for future tourism and responsibility for the local Crimean government.

Historically, Crimea has been a popular vacation destination for Russians. Bringing in a popular pastime such as gambling would help to increase stability in the region and solidify Russian control and majority in Crimea. In a similar way, this new law would be a windfall for the local Crimean government. They are now adapting to work within the Russian hierarchy.

This new prospect for a gambling zone would be under their purview. It would give the new government the opportunity to determine the size and location of the zone and moderate control over the distribution of licenses. “The goal”, states Viktor Zvagelsky, Deputy Head of Russia’s State Duma Economic Policy Committee, “is to lift Crimea at least to the average Russian level, socially and fiscally.” This again, could help aid Crimean economic development and cease their reliance on Russian aid. However, for all of its benefits, opening a Crimean zone does have several problems to overcome before construction can start.

Major investment would be needed to develop profitable casinos in the region. Not only would it be difficult to find the high level investors need for development but also convince them as to the profitability of such a prospect. Little investing interest exists in the four current gambling zones, which are already established. Not to mention the fact that potential investors would not see profit from any potential casino for five to ten years.

There has been talk by the major Crimean hotel chains to abandon the “gambling zone” plan in favor of allowing individual hotels to build casinos in their existing facilities. Russian officials such as Deputy Prime Minister Dmitry Kozak, who feared a reversion into a period of Russian history where casinos existed on every street corner, quickly turned down this proposal. A strict adherence to the zone policy of gaming will continue under Russian authority but it is clear that a certain amount of leeway will be given to the Crimean authorities in developing this “new Las Vegas.”