Russia’s Azov-City Casinos Ordered To Shut OperationsMay 4, 2016 12:13 pm
In a move designed to boost business to gambling venues in the former Olympic host city of Sochi, Russian president Vladimir Putin has now ordered casinos located in the Azov-City gaming zone to cease their operations by January 1, 2019.
Whereas Azov-City in Russia’s south-west became the country’s first official gambling zone back in 2010, Sochi located just 340 miles away by road did not receive an approved gambling status until July last year. Sochi was built with the 2014 Winter Olympics in mind, but ended up costing the country a huge $51 billion to complete. Its recent gambling license is therefore seen as a way of helping the government to retrieve some of its massive investment.
In the meantime, the casino operators who sunk their money into Azov-City are expected to receive compensation for their financial losses.This includes the Royal Time Group and Shambhala, the latter of which said it would seek at least 10 billion rubles ($145m) to help towards “all costs and loss of profit”. Nevertheless, Shambala boss Maxim Smolentsev said he wasn’t overly concerned by the development, and expressed his view that a lot of things can change over the next few years before the January 1, 2019 deadline was reached.
If the closure does go ahead, though, up to 2,500 people employed at Azov-City casinos will then lose their jobs. Furthermore, such a drastic move is also expected to concern international gambling operators, as any company interested in investing in Russia could then face having their own venues similarly shut down just a few years down the road. As stated on gaming site RGW:
“During its existence, Azov-City has shown that people will play, even if casinos are located in the “open steppe.” Now, they have decided to close a thriving business without a good reason, contrary to prudence and with an impressive damage to the budget.”
In 2007, Russia’s gambling business was estimated by Price Water House Coopers to be worth around $4.6 billion, but by 2009 the Russian authorities concerned about the social problems associated with gambling decided to only allow gambling in a few special zones located far away from cities.