The fact that by July next year gambling operations in Russia must all be located within four zones designated for the purpose has so far failed to galvanise either operators or investors into action. So far the only moves to have been made are into other jurisdictions. Last week under the title Gambling Games More Expensive Than Olympic Ones, the Russian daily Kommersant commented that the creation of the zones would cost twice as much as the staging of the Winter Olympics in Sochi in 2014.

Feasibility studies have estimated the costs to be in the region of US$31.2 billion, with Azov-City the southern Krasnodar-Rostov area needing the most investment. So far only Casinos Austria International seems to have expressed some interest in operating on the future Russian gambling scene. Major Russian operators seem to be diversifying into other industries and expanding operations in other countries whilst still hoping that the gambling law will yet be amended.

As central government is not allocating funds to create the necessary infrastructure in the remote zones, local governments will need investors to cover around 80% of costs. So far there has been little response and the gambling industry is not convinced by figures put forward by feasibility studies. An anticipated turnover of US$17 billion from over 9 million gamblers visiting the zones is deemed by many to be unrealistic. A more likely number would be around 70,000 with only 2% of players travelling to gamble in the Russian zones.

When the casinos close in Moscow and elsewhere, the four zones are unlikely to be ready for gambling action. The massive task of providing suitable infrastructure will take far longer than one year and, even if investors are found, most Russian gambling will probably continue in illegal operations that bring associated criminal activity. The theory of gambling zones in Russia may have some merit but has yet to be proved in practice, and the odds are not looking good. (E-04.14.08)

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