Russia working to restructure gambling laws

Russia took a step toward tightening up its gambling laws this week as the Duma approved the first reading of a gambling bill proposed by President Vladimir Putin that will create four special gambling zones and ban the industry everywhere else.

If the bill passes unchanged by the end of the year, it would lead to the elimination of casinos and other gambling establishments in Russia's cities. The only gambling establishments that will be allowed will be in four special zones located in unpopulated regions. There will be two in European Russia, one in Siberia and one in the Far East.

The first zone will be created in July 2007 and the full bill would take affect by 2009, banning all gambling outside of the four zones, according to Alexander Kosopkin, Putin's representative who presented the bill to the Duma.

Gambling establishments that are currently licensed and operating in cities will have a certain amount of time to close down or relocate, depending on the size of the establishment. Large casinos will have until 2009 to comply, while slot machine halls smaller than 100 square meters, casinos smaller than 800 square meters, and gambling businesses with net assets below 600 million rubles will be shut down by July 2007.

Casinos that make the move to a gambling zone will be granted five-year licenses for operation. The bill will also establish a minimum gambling age of 18.

The bill is facing some criticism in the nation because it lacks specifics such as where exactly the zones will be as well as how they will be set up. There are doubts as to whether the zones could be set up and gambling businesses reestablished in them in the time frame given in the bill. Other criticisms stem from the bill prohibiting betting on friendly card games in private homes and for restrictions on online gambling.

Many people believe the bill will undergo quite a few changes for those reasons before it will be fully passed into law. One change being suggested is to push back the deadline for businesses to move to the new zones to 2011 rather than 2009, which would give them more time to create the proper infrastructure in the zones and attract people to them.

In Moscow alone, which doesn't plan to apply to become a gambling zone, more than 500 gambling businesses will have to shut down or move. The Association for the Development of the Gaming Business has predicted the entire gambling industry could shrink by at least 70 per cent by July 2007 with the implementation of the bill.

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