Since 2009, when traditional gaming establishments in Russia were banned, gambling businesses could operate only in four special zones. However, in reality only one of these gambling areas operates (Scherbinovskiy district of Krasnodar region), and even there a number of casinos could have been much bigger – by now there are only two of them: “Shambala” and “Oracle”.
However, there is a huge number of illegal clubs and underground establishments across the country. Despite the fact that gambling was prohibited in 2011, each year law enforcement officials detect hundreds of “illegals”, seizing tens of thousands of machines, but they cannot ultimately break down these gambling businesses. After a few days, many establishments authorities have closed re-open and often at the same address. Owners of these establishments may be put off with fines.
How to beat illegal gaming
The reason the authorities are ineffective is the notorious legislative weakness. To incriminate the owner of any club with slots or institutions with poker tables and roulette, it must be proved they really have profited from it. And that is extremely difficult due to limited access of outsiders and the ability to quickly destroy the evidence, if there is an unexpected check.
But law enforcement authorities hope things will change soon. There is a bill that allows blocking illegal gambling websites and portals, and one will have to stand trial even for the organization of gambling business, regardless of the level of illegal income.
In particular, it is suggested to significantly increase fines (300,000 or amount equal to two years of the individual’s income). There is a possibility of imposing mandatory community service and arrest of up to six months. As a tougher sentences the guilty can be taken into custody for 12 months, followed with prohibition to be engaged in certain activities for a similar period of time.
If it is proven that gambling business brought its owner over 1.5 million income, authors of the bill suggest to make penalties more substantial (500,000 or income of up to three years), at this period of community service, as well as the term of imprisonment (up to three years) are both increased. Evidence of illegal income of over 6 million, including creating an organized group, threatens fines at the amount of one million or imprisonment of up to six years plus a 500,000 fine.
Thus, law enforcement agencies will be given free hands and their work will be facilitated, and owners of illegal casinos (including those using virtual platforms) – will be forced to stop their operation. In coming months we will see how toughening penalties will affect the situation (and in our country this is a real way for development of corruption schemes).
How to grow legal casino profit
So far “Azov-City” is the only operating official gambling area and only this year it has brought the regional treasury more than 90 million in taxes. Two casinos are opened there: company “Royal Time” has built “Oracle” and JSC “Shambala“ opened establishment of the same name.
The fact that these establishments are located within the resort zone of ?? Azov Sea coast has largely determined their success. Maxim Smolentsev, General Director of Shambala, says his first casino has achieved considerable success, with annual attendance and turnover increases of around 30%.
The company’s plan is to construct at least one more establishment in each Russian gambling area. However, today’s priority is development of “Azov-City” not only in Scherbinovskiy, but also in the vicinity of Anapa, that is still a part of gambling area.
This is interesting that even in special gambling area one can find lots of “underground“ establishments. This year, operation of almost 300 establishments was stopped; controlling authorities seized about a 1500 pieces of equipment.
Gambling business in the “Azov-City” is developing
Success of the first establishment stimulated JSC “Shambhala“ to construct a second casino, Nirvana, that will start its operation on December 18. Maxim Smolentsev said that about 200 million were invested in construction of Nirvana; the investments will be returned within a maximum period of five years. The casino area is about one and a half thousand meters, it will be better planned and more functional.
The second phase of Shambhala is also due sooon; project implementation took a little less money (about 160 million) and the complex will include a five-star hotel, and the building will be nine storeys. Construction should be complete by the end of 2014 – gradually the gambling business in Russia is beginning to mature.
