The Russian gaming world may be shrinking but Ritzio Entertainment Group is expanding and diversifying. At the beginning of August the company announced plans for Ritzio International to purchase and build gaming halls in Italy and Germany. In St Petersburg, where the authorities have decreed the abolition of gambling operations by 1 January 2008, eighteen months earlier than Russian law requires, Ritzio is in talks with a supermarket chain over a joint venture to turn the gambling halls into food halls.

Ritzio was already branching out into the international gambling market before the Russian State Duma decided to banish gambling to four remote zones. The company already has operations in Ukraine, Kazakhstan, Latvia, Lithuania, Estonia, Romania, Czech Republic, Belarus, Bolivia, Peru and Mexico. Developing restaurant and real-estate management businesses are now joining the string of gaming halls, casinos, bars, nightclubs and entertainment parks operating under the Ritzio Brand.

Ritzio has not given up on Russia. In an interview last month co-owner Oleg Boiko said he believes the Russian authorities will reconsider their gambling stance. He bases this on his opinion that investors will not want to put money into the special zones, where it could be difficult to attract visitors, and that the government is likely to amend the gambling law in due course. Asked if there could be compromises between the state and the gambling industry, Oleg Boiko replied:

“There can be many options, the simplest of them being to let only large operators do business. Actually, that is what we were striving for, but we have not been able to convince the authorities that we were right. Large and transparent operators who want to be at the stock exchange will themselves maintain order on the market. They are the most interested and incorruptible part of society. They would be the best fighters against illegal operators and violators of various laws among gambling business players.”

Whatever the final outcome for Russian gaming, Ritzio is not standing still. A parallel holding has been established and up to US$2 billion available for investment in the retail industry. The company even has plans to enter the D-I-Y market, but there is no intention to close or sell the gambling business. Ritzio may be changing its focus slightly but gambling will remain a growth area. In the words of Oleg Boiko, “The company has a new life.” (E-08.21.07)

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