Russia shuts down casinos under anti-vice plan

The government shut down every last legal casino and slot-machine parlour across the land, under an anti-vice plan promoted by Prime Minister Vladimir V Putin that as recently as a few months ago was widely perceived as far-fetched. But the result is  hundreds of thousands of people thrown out of work.

And in a move that at times seems to have taken on almost farcical overtones, the Kremlin has offered the gambling industry only one option for survival: relocate to four regions in remote areas of Russia, as many as 4,000 miles from the capital.

The potential marketing slogans — Come to the Las Vegas of Siberia! Have a Ball near the North Korean Border! — may not sound inviting, but that is in part what the government envisions.

All the same, none of the four regions are prepared for the transfer, and no casino is expected to reopen for several years. As of July 1, not even two decades after casinos began proliferating here in the free-for-all post-Soviet era, the industry’s workers were out on the street.

“This is shaking my life to the core — such a blow for me and my family,” said Irina Mysachka, 32, a single mother who is a supervisor at the Shangri-La Casino in Moscow, which appears as orderly and preened (if your tastes run to fire-breathing neon dragons and other Oriental kitsch) as any similar luxury venue in the United States.

“The authorities are taking this step without thinking at all,” she said. “They have not considered what this decision means for the workers. With the crisis, it is going to be very difficult for us.”

Unable to locate a job in Moscow, she said she was going to leave her five-year-old son, Yegor, with her mother and venture abroad.

No hope

Aleksandr Osin, 24, who has been at Shangri-La for five years, said he would try his luck in the insurance business, but was not hopeful. “We all thought that this was some kind of government thing that would not happen,” he said. “But now we know.”

The law that started the whole process was introduced in 2006 by Putin, then the president and now the prime minister, who spoke of the perils of the blackjack tables and the one-armed bandits, of shady characters having a grip on the industry.

The casinos have repeatedly asked for a reprieve, proposing a regulatory body to cut down on abuses, and lately pointing out that the ban would create hardships for workers during the economic crisis. The industry has also said it pays more than $1 billion a year in taxes.

But Putin and his protege, President Dmitri A Medvedev, have not yielded. “The rules will not be revised in any way,” Medvedev said last month, “and there will be no backsliding, although various business organisations have been lobbying for precisely this.”
As in many countries, the gambling industry here does not have the loftiest of reputations, and many Russians will not grieve for it. Still, many of the 40 or so casinos in Moscow sought in recent years to behave more respectably, even as hundreds of slot-machine parlours retained a seedy, enter-at-your-own-risk feel.

The gambling industry says the ban will leave more than 4,00,000 people without work in Russia, at a time when it has been hard hit by the economic downturn: the World Bank predicts the economy will contract by 7.9 per cent this year. The government has put the figure of people losing their jobs at 60,000 people, though industry analysts say that is absurdly low.

Storm International, a gambling conglomerate controlled by a British expatriate, Michael Boettcher, said that until recently, it alone employed 6,000 people at Shangri-La and several other casinos in Moscow.

Casinos in Russia are now to be confined to the Altai region of Siberia; the coastal area of the Far East, near the border with North Korea and China; Kaliningrad, which is a Russian enclave between Poland and Lithuania; and the Azov Sea region in the south.
Until casinos open there, Russia will be one of the few countries in Europe without them — though of course, underground ones are likely to be established.

After the law passed, federal officials and casino executives seemed certain that it would be watered down, which is apparently why neither the casinos nor the four regions did anything to prepare.

“You know, in our country, the decisions are made by only one person,” said Samuil Binder, deputy executive director of the Russian Association for Gaming Business Development. He was referring to Putin.

Drastic changes

After the Soviet Union’s fall in 1991, gambling sprang up everywhere in Russia, from first-class venues in Moscow to side-alley hangouts in the provinces. The crazy-quilt growth was something of a metaphor for capitalism here, full of possibilities and schemes and corruption.

The industry has been largely unregulated, and especially in recent years, almost anyone could get a license, for as little as $50. Russia is not a straight-laced place — rates of smoking and drinking are high — but an outcry about gambling ensued.
“It is not only young people, but also retirees who lose their last kopecks and pensions through gambling,” Putin said in 2006.

His plan was announced during a spy scandal between Russia and its neighbour Georgia, and the timing suggested that Putin was in part seeking to wound the Georgian diaspora here, which is said to have an influential role in the industry.

As with the workers, it seems to have dawned on the gamblers themselves only recently that the casinos are closing. “It is going to be strange, and even now, it’s hard to believe,” said Aleksei Ustinenko, 29, a construction executive who was playing at Shangri-La.

“Here we are, in one of the biggest, most beautiful, most expensive cities in the world,” he said. “And yet other people can decide that I cannot gamble if I want to.”

Some casinos said they might try to devote some space to private poker clubs, which they believe will be allowed under the law. But executives say such clubs are far less lucrative, and will employ very few workers. And so labourers have been pulling down gambling signs and carting slot machines from venues all over Moscow.

“There was a time when all these clubs and casinos grew like a cancer tumour,” said Moscow’s mayor, Yuri M Luzhkov. “We will close them all. Moscow will now be clean.”

The New York Times