Russian Gambling Bill Making the Rounds - Wins Round One

24 November 2006

Newspaper

iGAMING BUSINESS
24-11-06

The Gambling Bill proposed by President Vladimir Putin in October, which plans to set up four gambling zones in Russia, has been approved at its first reading by the Duma last week by a vote of 440-0 and one abstention.

The president had proposed the bill after the Interior Ministry launched an operation to check the financial, tax and sanitary-epidemiological documents of a variety of gambling establishments in the capital allegedly linked to the Georgian mafia.

The bill has been enforced to tighten control and ultimately ban gambling in Russia with the exception of the four designated zones by the start of 2009. The four special zones are to be located in unpopulated regions: two in European Russia, one in Siberia and one in the Far East. Federal authorities will grant five-year licenses for operation inside the zones.

The legislation has already been criticised for prohibiting activities such as betting on friendly card games in private homes, and for restrictions on online activities, with gambling businesses pushing to soften the bill’s provisions and extend the gambling ban beyond 2009.

However, the mechanism for creating the zones would seem to be the key to the legislation’s success, as the current version does not outline if or how the zones might be enforced within residential areas, prompting some to speculate that the bill is likely to undergo change.

‘There is no doubt the bill will change beyond recognition,’ said Yevgeny Kovtun, a spokesman for the Gaming Business Association, whose members have been operating in Russia for the past decade.

The Association for the Development of the Gaming Business predicted that the national gambling industry, whose revenues surpassed $5 billion per year, could shrink by at least 70 percent by July 2007 if the bill is implemented.

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