Thousands of Russian gambling halls close due to strict new location restrictions

On Wednesday, July 1, 2009 thousands of Russian gambling halls shut down because of new restrictions that provided for gambling businesses only in four remote regions.  The law went into effect at midnight and was expected to leave more than 400,000 people unemployed during an economic crisis when unemployment is already on the rise.

In Moscow alone, 40,000 workers were affected at 30 major casinos and 500 small gambling halls and slot parlors.  Police were checking gambling halls in Moscow to make sure they were closing.  The law was passed three years ago and only allows gambling in four zones in far regions for Russia thousands of miles from Moscow.  Casinos may operate in the Baltic Sea region Kaliningrad; the Pacific Coast region Primorsky; the mountainous Altai region in Siberia; and the southern cities Krasnodar and Rostov where the 2014 Olympics will be held.  Construction on sites in these regions has just begun, so it will be months, possibly even years, before gambling will be able to resume in Russia.  One large stretch of land in the Krasnodar and Rostov region has been allotted to a large complex called Azov-City, and at this point it isn't more than just a construction site.  The governor, Alexander Tkachyov attended a ceremony for the zone's first day and encouraged investors to put cash into the region.

There have been many public complaints by elected officials about the gambling ban, but it is unknown how much support the ban has among the rest of the population.  Some of the businesses affected by the restrictions will venture into other businesses such as market research.  Others will rent out their facilities.  There are some that will try to find ways around the law by opening as poker clubs, with the argument that poker is not gambling because it is a game of skill rather than a game of chance.  Some may try opening as internet gambling establishments where players can place their bets, but servers are located in the legal gaming zones.  Moscow's mayor, Yury Luzhkov has publicly criticized those who attempt to work around the law.

When the law passed, it was part of a plan by Putin to be known as a clean, hard working president.  But it was also an opportunity to get rid of the criminal element that is often tied to Casinos.  But experts believe that plan will backfire.  It will drive gambling underground and the criminal element will be more involved than ever.