Russia’s president Vladimir Putin has personally submitted a draft law to the Duma on the creation of the fifth gambling zone, this time in Crimea, which Russia is desperately trying to master. The draft law stipulates amendments to the Law “On State Regulation of Activities Related to Organization and Carrying Out Gambling, and Regarding Introduction of Amendments to Some Legislative Acts of the Russian Federation,” which contains the list of allowed gambling zones. This is the third time that the idea to turn Crimea into a new Las Vegas has popped up, and it is enthusiastically embraced by the local self-appointed government. They remain true to themselves, in a sense that there is nothing besides the once discarded idea and former failures yet, but the vice prime minister of the self-proclaimed government Rustam Temirgaliev already declares in public that the gambling zone in Crimea will be more profitable than the three previous Russian ones, and will pose “a serious competition for Chinese Macau, American Las Vegas, and European Monaco (?).” He even stated that he found one and a half billion dollars for the creation of the zone, but these words should not be trusted, since he could not name a single source of those funds.
And the incumbent resort minister of Crimea’s self-proclaimed government Olena Yurchenko was even more unsophisticated (perhaps, due to the lack of experience, because it is her first month in office) when she said in Moscow: “Crimea can surpass Turkey by tourism capabilities if a gambling zone is created. The main principle of the Crimean tourism business operation is ‘all inclusive,’” the “minister” thinks. Competing with Turkey, which hosts up to 40 million tourists per year (with 263 million night stays in 2013), let alone surpassing it, given that Crimea hosts from 1 to 4 million guests only: not a single minister in Crimea has boasted that much.
WHAT ARE WE DEALING WITH?
So, what the players call excitement and businessmen, an extremely profitable business, in doctors’ opinion is a persistent condition known as problem gambling, or ludomania. Game addiction appeared in the 1960s as a “Chinese syndrome.” Some scholars think that ludomania in CIS countries is on the verge of turning into an epidemic. There are several medical centers that specialize in treating ludomans in Russia, but the outcome is not always successful.
So, we should start with a question: does the Crimean population want to accept a certain number (in the new conditions, a significant number, it should be assumed) of such people?
In Russia itself, gambling business has been prohibited since July 1, 2009, everywhere except for the specially designated zones. There is one zone on the border of the Krasnodar Krai and Rostov Oblast, called “Azov-City,” but due to the luckluster results it was decided to move it closer to Anapa, a resort in the Krasnodar Krai. Three more zones are being built in Russia, but gambling establishments do not function there yet.
And now on the very idea of a gambling center in Crimea. It has been in the air since the moment gambling business was banned in Ukraine. Or, to be more precise, it was not banned but driven underground, there are thousands of underground gambling halls, illegal poker clubs, and online gambling. The idea was suggested by Crimea’s Prime Minister Anatolii Matviienko in 2005. A draft on creating a certain gambling zone was proposed by MP Lev Myrymsky (who himself is known as a fervent gambler) and former vice prime minister of Ukraine Borys Kolesnikov. It was lobbied by ministers of Mykola Azarov’s Cabinet, and it was supported by the previous Ukrainian prime minister of Crimea Anatolii Mohyliov, but it was nothing more than words.
Now it is assumed that the gambling zone in Crimea, which, according to the preliminary assessments, will occupy a territory of 100 hectares, will be built exclusively at the expense of private investments. Temirgaliev said that it is planned to build the gambling zone on the Southern Coast of Crimea. It will be restricted and placed far away from bigger towns and cities. The second option views the territory between Alushta and Yalta near Hurzuf, without access to the sea. The final version of the construction site will be determined after the adoption of the draft law. At the same time, Russian experts think that one and a half billion dollars will not be enough to build an effective gambling zone. According to their preliminary calculations, five to seven or more billion dollars are required for the creation of a gambling cluster, that is, 1.5 times as much as the estimated cost of the construction of a bridge across the Kerch Strait. Just like with the bridge, a question about the source of financing and the recoupment time arises. That is why it is the best for the so-called Crimean government to part with their dreams of financial showers as soon as possible.
It is also unclear who and where took the decision on the creation of the gambling zone in Crimea, the issue was not discussed with the public. And as it was shown by short-term practice, the idea has gained a lot of enemies. For example, the Sevastopol community opposes the creation of a gambling zone in the city, they think it is not a proper place for such establishments. Secondly, Crimean Tatars are against it, since gambling and playing for money, and also various “making money out of money,” usurious interest, and even mere begging are forbidden and considered to be a sin in Islam. Mustafa Dzhemilev stated directly that Crimean Tatars are not going to let turn their homeland into a casino. A lot seem to forget that gambling for money is considered a sin in Christianity too, that is why Christian believers also oppose the creation of the gambling zone.
WHAT IS IT NEEDED FOR?
Those who think that Russia has annexed Crimea to feed it at its own expense and create a dolce vita for locals are wrong. According to the data of Russia’s minister of finance Anton Siluanov, this year Russia’s budget deficit can reach 55 billion rubles (1.5 billion dollars) and Russia urgently has to find a way to cover it. At the same time, around 130 to 150 billion rubles are needed for subsidizing Crimea. Putin is not fascinated with the idea of feeding Crimea. That is why the gambling zone is not created for pleasure at all, but out of a bitter necessity to get easy and fast money. Experts on regional development know that the creation of gambling clusters is a well-known way of developing depressive zones. Perhaps, a thought occurred to someone: where can this money be made, if not in a casino? Today the Ministry of Regional Development of the Russian Federation offers the creation of an integrated tourism and entertainment cluster in two ways. The first one is in accordance with the existing legislation. The allotment of not less than 500 hectares of land will be required, which would be located outside city limits and as close as possible to transport and public utilities infrastructure. This option requires more time and investments. Budget revenue can be expected no earlier than in five or seven years.
The second option – making amendments to the RF legislation that would allow to open gambling establishments at the existing five-star hotels exclusively in the Crimean region. And then the opening of gambling establishments will not be investment- and time-intensive. The treasury will instantly receive additional income in the form of license payments, taxes on gambling activity, and all other related kinds of tax revenue.
However, as the vice prime minister of the RF Dmitry Kozak (whom Putin entrusted with supervising Crimea) said, there will be no exceptions for Crimea in gambling legislation. That is why the second option cannot be implemented. According to him, if such a decision is made, it will happen only within the existing legislative framework of the RF on gambling zones. This version is also corroborated by the fact that what Putin has proposed is not a special new Crimean law, but amendments to the already existing legislation.
THE IDEA AND LOCAL REALITY
As we can see, Temirgaliev and the Ministry of Regional Development of Russia are using entirely different notions. In Moscow they talk about 500 hectares of land, the self-proclaimed government of Crimea understands that this amount cannot be found, especially in one piece, and it would be good to find at least 100 hectares. “Besides, according to the Russian legislation, gambling zones must be located beyond the city limits,” explains expert Andrii Klymenko. “Theoretically, they can be situated in hotels in places with no permanent residents. But there are no such places in Crimea. I do not understand why they talk about the Southern Coast of Crimea, if it is a densely populated area.”
Crimea dreams about 10,000 jobs, and Moscow understand that it is real to create 2,500 at the most. Everyone is in a rush to make profit as fast as possible, so a surrogate can be created instead of a full-value gambling zone, just like what Temirgaliev offers: “A simplified option of the creation of a gambling city is considered, by way of uniting two or three sanatoriums, which have been working ineffectively before and have outdated amenities.” So, he wants to lure the world gambling industry on the “outdated amenities” and immediately start competing with Las Vegas, Monaco, and Macau? Well, well... And the world’s richest ludomans with bagfuls of dollars or euros obviously will not drag them to Crimean casinos to waste them all there across the mined border on Perekop, or spend days on a train, then on a ferry, and on a motorboat, and then on a bus.
The conclusion is unconsoling. If the gambling zone project will be pushed through by force, the outcome might result in several shabby casinos, where local gambling addicts will waste their last pennies.