Russia’s President Putin Enacts Gambling Legalization and Expansion Laws for Crimea and Sochi

Gambling in Crimea is now legal, as Russian President Vladimir Putin has signed the bill passed by the lower house of Russia’s Federal Assembly. The bill contained provisions establishing gambling zones in Crimea and for expanding the borders of the Krasnodar Gambling Zone in order to include the City of Sochi. 

An official statement released last Wednesday, announced the enactment, as well as stated the authority given to Crimean leaders in determining the gambling zone borders. The Crimean authorities under the Russian government, had previously voiced plans of establishing either a gambling zone in the Crimean south coast in which most of the resorts are located, or to have a spread of gambling destinations throughout the Crimean peninsula.   

Following Russia’s takeover last March, 2014, the government of Russia officially declared that Crimea is now part of Russian territory. However, there are concerns about the ensuing separatist movement and its possible adverse effects on Crimea’s tourism industry. In anticipation of potential economic problems, Russian lawmakers contend that authorizing gambling in the newly annexed territory could provide the solution, as this would help in attracting investors and in boosting the revenue of Crimea’s network of holiday resorts.

Currently there are efforts and promotional drives to maintain the large number of visitors that usually trek to the cluster of Black Sea resorts during summer. State companies, for one, are encouraged to give their employees a holiday treat, while Chinese tourists are being lured with a visa-free travel to Crimea.

The City of Sochi on the other hand, is home to numerous hotels, four ski resorts, five sports arenas, a stadium, and an array of restaurants and retail shops. It has enough roads and railways to serve as many as 20,000 visitors an hour. However, once the Winter Olympics is over, the athletes as well as the sports fans leave the city; after which, Sochi’s business leaders and operators have no clear idea from where and when the next visitors will come.

According to a recent report published by Moody’s Investor Service, the city needs to increase its annual visitors, to reach up to at least five million a year in order to see full occupancy in Sochi’s hotels. The general opinion is that such an increase is unlikely to happen after the Winter Olympic Games. 

Reports also have it that German Gref, the head of Russia’s largest lending institution the Sberbank, had put forward the Sochi gambling zone initiative. Thereafter, Russian lawmakers saw wisdom in Gref’s proposal to include the city and the surrounding areas to the Krasnodar Gambling Zone. Apparently, Russian lawmakers are attracted to the potential benefits posed by Sochi as a gambling destination, for which the tentative location of future casinos will be in Olympic Village.

Although the government banned wide spread gambling in the country in 2009, the ban was not absolute, since it established four areas in which regulated gambling is permitted; namely the  Azov City in the Krasnodar Zone, the Primorye Zone in the Primorye Territory, the Sibirskaya Moneta Zone in the Altai Territory and the Yantarnaya Zone in the Kaliningrad Region.

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