Azov-City Gaming Zone Ordered to Shut Down Effective December 31, 2018

Azov-City Gaming Zone Ordered to Shut Down Effective December 31, 2018

Russia originally intended to close down the Azov-City gaming zone in the Krasnodar Region as far back as 2016, but a series of delays and pleas from the zone’s operators provided it with an extended stay of execution. Last week, however, its death sentence was formally passed after Prime Minister Dmitry Medvedev ordered the country’s oldest gambling zone to be liquidated, with all casino required to shut down their business effective December 31, 2018.

Russia’s Gaming Zones

In 2009, Russia restricted gambling activities within the country to four specific geographical gaming zones, namely the Primorsky Territory, the Kaliningrad Oblast, Altai Krai, and the Krasnodar Region, with the annexed territory of Crimea subsequently added to the list in 2014.

Located within the Krasnodar Region gaming zone is Azov-City, which currently features three casinos, the biggest of which is Shambala Casino, followed by Nirvana Casino, and Oracul Casino. According to Russian law, a single region is allowed to host just one gambling zone, and unfortunately for Azov-City President Vladimir Putin ultimately decided that Sochi located some 650 km away within the same region would make a better gambling zone than its counterpart.

Consequently, the government later announced that Azov City gaming zone would be closed in order to focus gaming operations in Sochi. Following the 2014 Winter Olympics, the Krasnaya Polyana gambling zone was subsequently created within the city of Sochi, and six months after the Sochi Casino and Resort opened at the start of 2017, it had become the most popular of the Krasnodar Region’s four casinos.

No Compensation For Casinos

Earlier this year, the government announced legislation to financially compensate casino owners with properties based within gambling zones that are closed within 10 years of their launch. Nevertheless, the Azov-City region was specifically exempted from the legislation, and prevented from applying for compensation. This represents a further twisting of the knife for those businesses which have already invested around RUB6 billion, or more than $90 million, developing their casinos in Azov-City.

Krasnaya Polyana Zone

There are currently just two gambling venues in the Krasnaya Polyana region, those being Casino Sochi in Gorky Gorod Ski Resort, and a slot machine hall called Bonus, which was set up as an affordable alternative to the high-end Sochi Casino.

During its first year of operation, Casino Sochi generated RUB4 billion in revenue, or roughly $60 million, with its owner stating that the number of tourists visiting the casino far exceeded the company’s expectations. Furthermore, around 575,000 people from 129 countries have visited Casino Sochi over the past year and a half, with its daily record being 3.8 thousands visitors.

In August of this month, Casino Sochi and Bonus subsequently attracted a massive 55k in customers, while the three casinos based in Azov-City saw their customer numbers dwindle to a disappointing 11k.

On January 4, 2019, the Krasnaya Polyana zone is also set to welcome the launch of a brand new casino called Boomerang. The property will be owned by the same company which operates Casino Sochi, and is similarly designed to integrate with its nearby ski resort, which in the case of Boomerang will be the prestigious Gorky Gorod resort. An extract from a Russian affiliate site called News of Gambling quotes Dmitry Anfinogenov, deputy general manager of Casino Sochi, as saying that over the next five years his company intends to implement a number of other ambitious projects in the Krasnaya Polyana gambling zone, stating:

“The successful implementation of the plans, according to Anfinogenov, depends, among other things, on the projected tax policy of the state in relation to the gambling business. The launch of new projects will attract new guests to Sochi and will make the resort more attractive for foreign tourists,” explained the article.