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Why Gambling Zones in Russia Didn’t Pay Off?

  • After land-based casinos were banned in 2009, the government decided to create gaming zones
  • The Azov-city was the first entertainment zone
  • Gaming zones promote underground casinos
gambling zones in Russia

The casino ban introduced in 2009 paralyzed all gambling businesses across the country. Since then, the Russian government made a few attempts to establish regulated gambling. Starting from June 1, 2009, all gambling activities were only permitted within four assigned entertainment zones. But why gambling zones in Russia didn’t become as popular as Las Vegas? Let’s take a closer look.

Is gambling legal in Russia?

Currently, such forms of gambling as official sports betting and lottery are legal in Russia. To date, the most popular betting sites are 1xBET, and 888sport. Online betting sites in Russia must be members of the “First Center for Taking Interactive Bets” in order to operate legally.

However, land-based casinos are only allowed in so-called gaming zones. In October 2006, Vladimir Putin signed the bill on State Regulation of Gambling Activities. The bill aimed at relocating all casinos to assigned gaming zones. Starting from June 1, 2009, all gambling activities were only permitted within four assigned entertainment zones: Siberian Coin (Altay), Primorye (Primorye region), Yantarnaya (Kaliningrad region), and Azov-city (Rostov region). Later on, the government established two more zones in Sochi and Crimea.

The Rise and Fall of the Azov-city

Azov-city was the first gambling zone to open in 2010. Despite the creation of the gambling zone was a promising project, it hasn’t paid off. Royal Time Group LLC spent more than $342,000,000 to launch the first casino and a hotel. Later on, the company went bankrupt.

According to the law on gambling, only one gambling zone can exist within one region. After the government decided to launch the new zone in Sochi, the fate of Azov-city became uncertain. Although investors had put large amounts of funds into the Azov-city, the government suddenly decided to shut down the zone in 2016. The liquidation of the Azov-city gambling zone on December 31, 2018, didn’t entail financial compensation for casino owners.

gambling zones in Russia
Poker chips – Image via Pexels

Gambling zones in Russia – a total failure?

To date, the Primorye gambling zone, named after the Primorye region, is the only successful facility. The facility is located close to Vladivostok and the Chinese border, so it attracts lots of Russian and foreign customers. The Primorye zone also received a huge amount of foreign investment – the number exceeds $700 million.

G1 Entertainment launched Tigre de Cristal, the first casino in the resort area in 2015. Tigre de Cristal is still the largest and most successful operating casino in Russia. Recently, the First Steamship company has invested $500 million in the development of the entertainment zone. Two more casinos, two hotels, and a tax-free mall will be launched by the end of this year.

Conclusion

The Russian government expected that the casino ban of 2009 will reduce the number of underground casinos. However, “side casino businesses” are still blooming and the establishment of gaming zones only made things worse.

The government expected that entertainment zones will generate a huge income, bring job opportunities and develop sparsely populated areas. However, the lack of proper infrastructure and transportation slowed down the development of facilities. Neighboring Ukraine already revised its gambling ban, so maybe the matters will change in the near future.

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