Gambling Operators Are Warned (Russia)
(source: Moscow Times September 29, 2006)
Gambling Operators Are Warned
By Maria Levitov
Staff Writer
A senior Finance Ministry official told gambling operators to prepare for hard times, while scantily clad girls danced outside the conference hall at Moscow’s annual international gaming expo Thursday.
Dancers dressed as cowgirls moved to the din of slot machines at Crocus Expo, where hundreds of casino bosses, slots operators and manufacturers of gambling equipment gathered in the hope of understanding what pending legislation on gambling means for their booming businesses.
“Prepare for the worst and hope for the best,” Alexei Savatyugin, chief of the Finance Ministry’s financial policy department, told the conference.
The State Duma is expected to vote on the crucial second reading of the legislation as early as next week and no later than November, Savatyugin said.
The bill represents the Duma’s first serious attempt to impose strict regulations on the gambling industry, worth nearly $6 billion last year. The Finance Ministry’s Federal Tax Service has been in charge of handing out gambling licenses since last November, but regional authorities currently govern all other industry matters.
“The stricter the legislation, the more chances it will have to be approved by a greater number of politicians,” Igor Dines, Duma deputy with United Russia, told the conference.
Gambling operators’ revenues are not expected to grow this year because regional authorities have been cracking down on gambling, said Boris Belotserkovsky, chief of Unicum, Russia’s largest producer of gambling equipment.
Belotserkovsky said 43 of Russia’s 88 regions had enacted their own legislation on gambling. The number of gambling facilities nationwide is to drop to 16,000 this year from 24,000 in 2005, according to Unicum’s figures.
City Hall has said the number of Moscow’s gambling venues is to fall to 540 in 2007 from the current 855 because of legislation enacted last year. Among other restrictions, the municipal legislation banned slots halls from doing business near metro stations, educational establishments and federal property and boosted taxes for gaming operators.
The gambling industry has the potential to grow to $9 billion, if the federal law is not “too draconian,” Belotserkovsky said.
The federal bill promises to be severe, given that provisions to restrict gaming establishments to special zones outside of city centers and institute a quota system for granting licenses to gambling operators might be included in its second reading.
The first reading of the bill, proposed by United Russia, passed in a 330-105 vote in March.
The Cabinet has been “eagerly awaiting” the bill, but its formulation is slow, Savatyugin said. Some 400 amendments were submitted after the first reading, the lion’s share of which concerned regulating locations for gambling, he said.
The location question is unlikely to be fully settled before mid-2008 “for obvious reasons,” Dines said. The presidential election is scheduled for 2008.
A government source familiar with the situation said that regulating “virtual gambling” on cell phones and the Internet was also holding up the second reading of the bill. It is a very difficult area of gambling to restrict without banning completely, the source said.
Date Posted: 30-Sep-2006
