CR138-p01-front_Coinslot NEW 09/04/2014 11:28 Page 1
APRIL 2014 • EDITION 138
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GAMBLING ZONES Sergei Aksynov (left) may not get his way with President Vladimir Putin (right)
Crimea wants casinos to boost its economy
C CRIMEA
Russia’s newest, if most disputed, territory believes its fortunes could benefit from casinos, helping it promote tourism and reboot its economy. But, this idea is likely to meet resistance from Moscow.
rimea’s Prime Minister Sergei Aksynov has called for the territory to host a new Russian gambling zone as part of wider plans to boost its economy now that it has broken away from Ukraine. Apart from long being an important Russian naval base and tourist destination, Crimea brings little to its annexor’s table economically. There are untapped gas and oil deposits that might bring some money in, but as part of Ukraine it contributed only around three per cent of GDP and, says the government in Moscow, is currently running a deficit of around E1bn. Russian tourism could be its best hope to create new jobs and income and, according to reports in the Austrian newspaper Die Presse, Aksynov wants the issue examined in Moscow. The prospect of creating another gambling zone for the Russian market was raised in late March and discussed with the Russian
Prime Minister Dmitry Medvedev during his visit to Simferopol on March 31. It was during Medvedev’s presidency that all casinos were banned in Russia and four gambling zones established at the far-flung edges of the country. In the six years since, only token establishments have been built in Azov City in southern Rostov region; ambitious plans for resorts in Primorye in the far east seem to have more chance of success with significant backing notably from Melco. However, plans for the Altai region have not yet been realised and nothing is even on the table for the Kaliningrad enclave on the Baltic Sea. During his visit, Medvedev outlined Moscow’s thinking for Crimea’s economic future. He told a meeting of Russian and Crimean ministers: “Our aim is to make the peninsula as attractive as possible to investors so that it can generate sufficient income for its own development. There are
opportunities for this: we have to take everything into consideration.” He added: “We have decided to create a special economic zone here. This will allow for the use of special tax and customs regimes in Crimea and also minimise administrative procedures.” Medvedev’s statement as yet leaves open the possibility for casinos to be part of the mix - it might offer a better prospect as a gambling zone than most of the others. Under both imperial and communist tsars, Crimea was the holiday destination of choice for the elite, with a southern Riviera offering a subtropical microclimate and warm sea bathing. Its fortunes as part of Ukraine have not been as good since the collapse of the Soviet Union but it retains its cachet, not least for reasons of simple nostalgia. Working against its resurgence as a tourist resort is the fact that it remains a disputed territory, which is likely to
discourage outside investment whether casinos are involved or not - there is nothing capitalism hates more than uncertainty. In the modern day, too, Russians boarding flights to go on holiday may choose any number of other destinations that are more developed, particularly if they want to gamble. Political distaste of casinos cannot be overlooked either. In February, the Russian news agency RIA Novosti released remarks made by President Vladimir Putin regarding the creation of a gambling zone in Sochi, advocated by investors worried about their prospects following the Winter Olympics. At a meeting with officials Putin said: “We agreed to a have a gambling area on the border between the Rostov region and Krasnodar Territory [the Azov City gambling zone], and then even agreed to allow that to cover part of the Black Sea coast. In my opinion, it doesn’t make sense to create another such area in
the same region, despite the fact that it would make a return on investment.” He added: “Gambling zones attract crime, but it’s not the only problem. That is a specific crowd - I’m not saying they are bad or good, they are kind of specific. It would almost deprive all families with more middle and upper-middle income of the chance to come here with children for family vacations, or would create such conditions that would make it significantly more difficult for our citizens to stay here with their families: it’s a completely different atmosphere.” Sochi having a high international profile as a tourist destination following the Olympics may be very different from Crimea, however, much of the reasoning behind Putin’s comments could equally be applied: the Crimean Riviera is if anything even closer to Azov City than Sochi, albeit without the land connection.
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