After Las Vegas in the United States, Macau in China and Singapore, it's Russia's turn to undertake a important construction project of "entertainment" zones particularly designed to welcome casinos, hotels and rest facilities in order to boost the economy and tourism.
Disappearance of Moscow casinos leading to the bill submitted by Vladimir Poutine
Following a series of controls conducted by Vladimir Poutine in 2006 in the Moscow-based gaming establishments, due to their potential "link" with the Georgian mafia (although no connection has it been proven yet), 524 casinos and gaming rooms disappeared.
And that is when he submitted before the Russian Parliament, a bill aiming to allow gambling in the country. Later that year, casinos have been replaced by the creation of zones dedicated to gambling in regions whose development is lagging behind. The zones are similar to the ones in Las Vegas.
Four mini Las Vegas zones
He sees in this new strategy a great opportunity to widen the market, even to compete with Singapore, Las Vegas and Macau. It's one of the goals the President set in the long run.
First of all, Russian gamblers will stop traveling abroad to play in casinos. With four local mini Las Vegas, it should be said that they have a very wide choice.
Officially, the four zones were: Azov City (Азов-Сити) in the Krasnodar Krai, Primorye in the territory of same name, Sibirskaya Moneta in the Altai Krai and finally Yantarnaya in West Kaliningrad.
However, a breaking news announced the closing down of Azov City. Which caused three casinos to disappear: the Oracul casino (Оракул казино), the Shambala casino (Шамбала казино) and the Nirvana casino (Азов казино). The investors have lost lots of money in the process. For all that, the President wants to have Azov City (Азов-Сити) replaced with Crimea.
As expected, Russia intends to open the four zones mentioned above. To do so, it is seeking to attract investors to the territory in order to develop its economy, but also to revitalize the secluded regions. In addition to gambling, tourism expansion will be privileged through the creation of hotels, shops and boutiques, sports and rest facilities...
Zones 2 and 3 target a rather wealthy Asian clientele: mostly Koreans, Japanese and Chinese people. Known to be the biggest fans of casino, they are used to travel to prestigious destinations such as Las Vegas, of course, but it can quickly get very expensive. All the more so as distance and money are two factors which motivate this kind of travels. The two other zones are dedicated to players coming from Europe and the Middle-East.
The same thing happens to rich Russian players who go less and less in foreign casinos because of the crisis and the rouble devaluation. As the published article in The Guardian reports, casinos in the Belarus capital, Minsk, really popular among Russian players, who account for 80% of their clientele, suffer from a considerable reduction in attendance.
"Owing to the proximity of their respective countries, Chinese, Japanese and Korean tourists will easily access to the gambling cluster", Alexei Martynov says, CEO of the International Institute of New Countries. Note that gambling is forbidden in Japan, allowed to foreign passport owners-only in South Korea and banned from the Chinese territory except for the leisure zone of Macau.
The location of the zones was neatly defined by the economic policy of the entrepreneurial spirit and tourism Commission.
The game is from this point forward allowed in the four defined gambling zones. They have been chosen for both their potential clientele from neighbor countries, and their distance from major cities, which implies the protection of the population from the risks of gambling addiction. This last point is an actual societal issue in Russia.
Though Crimea, Sibirskaya Moneta and Primorye are quite developed areas with establishments already built or in the process, we can't say a lot about the fourth area, Yantarnaya.
Entertainment zone number 1: Crimea
Crimea, which belongs to Russia since March, 2014 and Sotchi, host city of the previous winter Olympic Games, can from now on foster casinos and gambling.
According to the expert estimations reported by the Russian news press Itar-Tass, gambling in this area could generate up to 25 billion rubles ($381,5 million) a year.
The contours of the new zone is to be defined by Crimea authorities. Currently, they are leaning towards two possible options: a spread out area all over the peninsula or a local Las Vegas located near the coastal resorts of Yalta and Alouchta.
The zone will soon have entertainment facilities (casinos, sporting activities, restaurants...), but also rest facilities such as hotels, spas, etc...
- Entertainment zone number 2: Sibirskaya Moneta
This gambling area is located in the district of Altaysky, which is 15 miles from the special economic zone called "Buruzovaya Katoune".
The area already has its first resort casino & hotel, the Altaï Palace:
The complex opened its doors on November 1st, 2014. The hotel rooms, restaurant, spa and gaming rooms welcomed the first visitors the following month.
It houses the Siberian Coin casino, which relies on luxury: woolen carpets imported from Italy, gold sinks... everything to lure players. As to gaming, it offers players 16 tables and 20 slot machines.
Royal Time Group, investor of the Oracul casino in the Azov City area which closed afterwards, plans to build its establishment in 2016.
Entertainment zone number 3: Primorye
Out of the four areas, Primorye is the most important one, but also the most developed zone. It is located in the Russian Far East, close to the South Korean border, north China and two hours flight from Tokyo. The zone is situated just 30 miles from Vladivostok and spreads over a 620-hectare surface.
Over the last four years, the Russian authorities have spent more than $1,76bn to make it one of next worldwide gambling capitals.
It is the area which aroused the most the enthusiasm of investors especially the Asian tycoons of entertainment. The Cambodian casino operator NagaCorp and the Chinese Lawrence Ho have showed their interest very quickly. By the way, it's Lawrence Ho who recently launched, through its society Summit Ascent Holdings, the first resort of the area with 800-million dollar investment, who is the fabolous Tigre de Cristal.
Image: Tigre de Cristal, the biggest complex Hotel & Casino of Russia.
It's a 7,200-square meter luxury complex similar to the ones in Las Vegas. The theme of the inside of the casino is based on China, which is not due to chance.
Its gaming room provides 800 slot machines, 15 Baccarat tables, 25 VIP tables and 40 classical gaming tables. Note that the number of machines will gradually go up. Its hotel offers 119 modern rooms and suites.
If Las Vegas was built in the middle of the desert, in Primorye, it's in the middle of the forest that the gaming establishments will be set up. By 2022, the area will have everything needed in terms of rest and leisure facilities in the same spirit than the rival cities.
The zone will have 16 more casinos and 3,4,5-star hotels similar to Tigre de Cristal, a port, sports facilities (ski trails, golf courses), villas and beaches, exhibition centers, a business building, several cinemas, pools and restaurants.
The opening of Tigre de Cristal near Vladivostok is a big event in the economy of the zone. The Global Market Advisors consulting group, which studied the viability of the project in this area, estimates that it would generate $1,2bn the third year and $5,2bn after the tenth year. That would ranked it at the fourth place of the top gambling destinations, behind Macau in China, Las Vegas and Singapore.
- Entertainment zone number 4: Yantarnaya
Yantarnaya is ideally located next to Finland in order to target European players. It's the less developed area because its launch was postponed until 2016. However, Royal Time Group, the company who also invested in Crimea and Azov City, is reported to build a 267,000-square meter casino complex, by 2029, including restaurants, bars and a hotel.
To conclude, those small territories should welcome 9,45 million people and generate a turnover of 17 million dollars.
Russia hits hard in order to attract investors. The lease offered will give them exclusive control over the lands until 2025 and the taxation on their gross gaming revenue will equal zero (against 39% in Macau). In exchange, the chosen companies commit to develop employment and tourism in the regions.
SOURCES / SITOGRAPHIE
POKER NEWS - Benjamin B - "La Russie veut construire son Las Vegas" (14/07/12)
LE COURRIER DE RUSSIE - Manon Masset - "Faites vos jeux" : Vladivostok mise sur l'Asie (28/10/15)
SPUTNIK NEWS - Tatiana Tabounova - "Las Vegas et Macao bientôt concurrencés par les casinos de Vladivostok (17/01/15) & Landmakers pass bill on gambling zones in Russia" (20/12/2006)
CLUB POKER - [Russie] "La stratégie du gaming "à la russe"" (12/02/14)
CASINO SONALIA - Peter Lacazio - "La Russie veut créer une zone de jeu en Crimée" (25/04/14)
FLINGUS - Sylvia H. - "La Russie veut devenir un leader dans les jeux d'argent" (26/01/15)
CASINOTOP10 - "Premier casino en Russie pour un futur Las Vegas russe ?" (14/06/13)
LE FIGARO - "Russie : les casinos autorisés en Crimée et à Sotchi" (23/07/14)
SIBERIA TIMES - "All in! Siberia’s first casino opens, complete with golden sinks" (08/11/14)
CALVIN AYRE - "Russia to scrap Azov-City gambling close three casinos" (31/01/15)
"Fini les casinos en Russie, sauf pour quelques 'Las Vegas'" (29/06/2009)