internationalcasinoreview No slot proposal has no hope of working News EUROPE CENTRAL, EAST & CIS


Moscow to get tough with 800 illegal casinos


A proposal to bring casinos back to Ukraine has shocked those looking to invest in any new sector with an apparent ban on slot machines. The Ukraine finance minister is considering expanding a list of zones where casinos will be able to operate. Whilst the proposal could now also allow casinos in Bukovel, Crimea, Morshyn, Mykcheve, Slavsk Carpathian and Truskavets, it also aims to ban sports betting, internet gambling and slot machines. It will only allow lotteries, card games, dice games and roulette. Industry insiders have been quick to say that the business would not be viable without slot machines.


Long gone: the legitimate, slightly more transparent, high-end of Moscow’s former casino industry.


ordered by Medvedev to shutter the city’s under- ground casinos once and for all.


“Recently I have been


receiving a lot of informa- tion that underground casinos are becoming wide spread in Moscow,” said Medvedev at the meeting with the mayor of the capital city


The president tasked the


mayor with “taking all neces- sary actions, raids, to see who is breaking the law. Those who run this business should go to prison,” said Medvedev. Sobyanin assured him that


With estimations of there being 800 underground illegal venues in the city, Moscow’s government has formed an inter- departmental alliance between its municipal authorities in the capital to ramp up their campaign against illegal casinos masquerading as lottery clubs. Gambling Compliance’s Andrew Gellatly reports.


illegaleagles RUSSIA


A recent meeting of the central administrative dis- trict (CAD) of Moscow agreed that heads of coun- cils, law enforcement author- ities, prefecture specialists and the inter- departmental commission of the Moscow government on gaming busi- ness would combine to form a new task force against underground casino opera- tors.


The resolution, made at a meeting held at the city’s dis-


trict emergency operations centre, will create 24- hour mobile enforcement units empowered to tour the city and seize gambling equip- ment and will begin as soon as next week. A federal ban on gambling came into effect in Russia on July 1 2009. The draconian statute demanded that gam- bling facilities be closed or relocated to four geographi- cally remote zones, but even before that time Moscow had been a central battleground in the fight against illegal gambling.


The then-mayor Yuri


Luzhkov waged personal crusades against slots par- lours for many years, banning them from locations nearby to Metro stations, and curtail- ing their neon advertising hoardings.


Since the countrywide ban came into effect, legiti- mate operators such as Moscow-based Storm International, have closed their casinos, or reconfig- ured them into luxurious retail and restaurant facili- ties.


Others continued operat-


ing, first with more legally ambiguous poker clubs and, when those were outlawed with ambiguous lottery clubs that use machines akin to lottery terminals usually as a front for casino opera- tions. Mayor Lushkov was


sacked by Russia’s president Dmitriy Medvedev in Sep- tember for presiding over a culture of pervasive corrup- tion in the city, but far from heralding a softening of approach, the new mayor of Moscow Sergey Sobyanin has apparently now been


New government ends Caesar’s Metropolis tax relief


axetaxrelief SLOVAKIA


The Slovakian parliament has voted to withdraw amendments which would have sweetened progress towards a Caesar’s funded E1.5bn casino development on the out- skirts of the country’s capital Bratislava.


The new coalition government in Slovakia has removed amendments which introduced inducements including tax rates lower than the rest of the gambling sector, for the ambitious project. The amendments were brought in by the previous government to attract investment to the country in the form of a joint venture between US giant Caesar’s (formerly Harrah’s) and Hungarian developer Tri- Granit, who are seeking to build a major casino development


outside of the capital Bratislava. The project, to be known as


Metropolis, would have included a casino, five-star hotel, retail, leisure, Aqua Park, golf, cultural and congress facilities and would have been located on a 30-hectare site south of Bratislava, located at the intersection of the D2 and D4 highways that lead to Vienna, Bratislava, Budapest and Prague. It was hoped the finished


Metropolis would attract 5m new tourists a year from across central Europe. It had been expected to create 28,000 long-term and tem- porary jobs.


Although not ruling expressly on the development, the legislative changes - which were approved by parliament and will come into effect on January 1 2011 - will weaken the chances of the build going ahead. According to the government the


10 January 2011 • europecentraleast&cisnews


main motivation for these changes is the search for tax revenue as, like other EU member states, Slovakia struggles to avoid becoming the next Euro zone failure. The venue was expected to generate E600m in taxes for Slovakia annually. Finance minister Ivan Miklos told


local press the tax incentives for the development were an ‘absurd’ and ‘wholly unreasonable step’ that were only brought in because of lobbyists.


He added that last week’s vote was not to decide the fate of the casino, but instead to end the ‘mega casino tax relief.’ Martin Jaros, a spokesman for the minister, said: “The current gov- ernment is not in favour of amend- ments tailored for one specific company and prefers a more sys- temic approach to shaping the business environment. Their


amendment just cancels this spe- cific tax regime. It does not in any way prohibit any company from pursuing its enterprise goals in the country.”


The build has been controversial with the public. In October, a peti- tion with 125,000 signatures was submitted to parliament objecting to the casino.


This is not the first time Caesar’s plans for a grand casino develop- ment in Eastern Europe has hit bumps.


Plans for a similar joint venture in Slovenia first won tax conces- sions from the government, but then fell apart with the casino operator and developer citing contractual differences.


“the required checks will be done as soon as possible, together with the law enforcement authorities.” Observers in Moscow say that beefing up the resources dedicated to policing Moscow’s thriving under- ground casino industry may now allow the overstretched city police to impound and store the gambling machines and equipment they seize - a task which until now has not always been possible - but they also note that casino managers are very experi- enced in their chosen busi- ness. British-born entrepreneur


Michael Boettcher, president of Storm International, observed that the operators of Moscow’s underground casinos are “nearly all former operators with very few, if any, new ones.” There are, though, estima- tions that there are even more slot halls and casinos in operation underground then before the ban came in. Still, CAD prefect Sergey Baidakov, said he would take a zero tolerance approach to the underground clubs,


many of which operate with elaborate security protec- tion: “Breaches are noticed, and even if they are covered not by the criminal law but by the


Administrative


Offence Code, material evi- dence should be seized anyway. Lottery equipment is evidence. “I think that, with their existing mode of opera- tion, 90 per cent of lottery clubs break the law. If they operate in full compliance with the legal requirements, it means they are not prof- itable.”


Last week, employees of the Economic Security Department raided two large underground casinos in Moscow’s Lokomotivny


Proezd seizing poker tables, roulettes and slot machines. Russian lawmakers are also considering introducing a new law that will fine inter- net players found playing at offshore online casinos. Ivan Savvidi, one of Vladimir Putin’s United Russia party members, revealed that the govern- ment is considering legisla- tion that will fine offending players between $15 and $65 in an effort to curb the pro- liferation of ‘computer clubs.’ Computer clubs, which


are in essence internet cafes to allow gamblers to gamble online quickly sprung up to fill the gambling void. Despite attempts by authori- ties to shut down these com- puter clubs reports put the number currently operating in Moscow at 100 and this is probably conservative. “Previously, the law only


concerned organisers of gambling and now the gam- blers themselves will also be responsible,” Savvidi said of his proposed measures.


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