Gambling explodes in Russia to tune of $5 billion annually
The new Casino Angara on Moscow's neon-flooded Novy Arbat street is the latest bet that this country's love affair with gambling is a sure thing.
The casino, which opened in February, has 32 tables and 69 slot machines on a floor that is aiming for a 19th century gentleman's-club atmosphere with its red carpeting, dark wood paneling and lamp light. The casino also stages cock fights and arm wrestling.
"Nice place. Not bad," said Mikhail Kustanovic, 33, a self-described high roller who favors blackjack and poker. "But in Moscow there is so much choice."
Gambling has exploded in Russia in the past three years, particularly in Moscow. A $5 billion annual business, it draws punters to ritzy establishments like the Angara, but also to the one-ruble slots in small arcades that dot city neighborhoods.
There are 58 casinos, 2,000 gaming rooms and approximately 70,000 slot machines in Moscow, according to city officials. In 2002, before the laws governing the licensing of gambling places were changed, there were 30 casinos and 20,000 slot machines.
"This business has just started to grow," said Yulia Drynkina, marketing director of the Angara. Another luxury casino is to open on the Arbat next year, and a new arcade opens in Moscow almost every day, according to city officials.
It is all driven by profit margins that can reach 40 percent, according to analysts. The return on one slot machine is $700 to $1,000 a month, according to industry analysts.
The industry's almost unrestricted development, especially the proliferation of slot machines in residential areas, has begun to trouble lawmakers and even some in the gambling industry who fear that a public backlash could lead to a ban.
"This is total debauchery," said Moscow Mayor Yuri Luzhkov, in a television interview this month.
In 2002, the lower house of the Russian parliament, the State Duma, gave a federal agency responsible for the development of sports and culture the right to issue gambling licenses, removing that authority from city or regional governments. In the last three years, the agency has issued at least 4,000 licenses in Russia.
"It exploded like a cancer," said Samuel Binder, vice president of the Russian Association for the Development of the Gambling Business, a group that represents larger operators in Russia. "There are machines in markets, shops, stations, even in apartment buildings."
City officials believe criminal groups are involved in the industry but do not entirely control it.
The Duma and several regional parliaments, including Moscow, are considering new legislation that would limit or effectively ban the industry.
"Moscow is the capital of our country and I don't think there are many who would like to rename it Las Vegas," said Andrei Metelsky, deputy chairman of the Moscow city parliament.
