MOSCOW. (RIA Novosti economic commentator Vasily Zubkov.) - Gambling is widespread all over Russia and the press is constantly discussing its related social problems, which seem to hit the economically disadvantaged the hardest.
The turnover of capital in the industry approximates $5 billion a year (that is, equal to the state budget on the four priority national projects). There are 58 casinos in Moscow alone, compared to 30 four years ago. Moscow left Las Vegas and Monte Carlo put together far behind long ago in terms of the number of slot machines, casinos and gambling clubs. Moscow has more casinos than all of Great Britain.
Unlike in the West, here you can gamble anywhere you want, be it in a grocery store, a place near a school or hospital, in the metro or at a bus stop.
Every month each machine makes between $700 and $1,000. The aggregate income of Moscow machine owners surpassed $3.3 billion last year, whereas the city received a mere $400 million in taxes. The city's authorities would like to toughen control over this business.
The situation at the national level is much the same. The State Duma, Russia's lower house of parliament, is planning to discuss a draft bill on state control over the playing of games of chance and bet. Chairman of the Duma committee on economic policy, entrepreneurship and tourism Valery Draganov, one of the authors of the bill, believes that in Russia gambling should become a bigger business and should oust the various semi-legal clubs that have flooded the streets, stores and dwellings of Moscow.
If adopted, the new law will increase the cost of a casino license from $100,000 to $1,000,000, the same fee as in Las Vegas. There will be more surprises for future owners of casinos or gambling clubs - apart from the license, they will have to present a mandatory irrevocable bank guarantee to the tune of $10 million plus a document confirming they have 5 million in their personal possession.
The bill imposes rigid requirements on the areas occupied by gambling facilities and their location. For instance, for a casino the minimum is 800 sq m and 80 sq m for gambling halls. The law would also impose tough restrictions on gambling capacities - at least 10 gambling tables per a casino and 20 slot machines for gambling halls on the condition that one owner has at least 25 halls and 1,000 machines. If casino owners want to install machines, they will have to have at least 40 and will have to receive a separate license.
Businessmen exploiting human vices will not be happy about the already drafted bill on a considerable increase in tax rates. The old rates were based on the results of 2001 and have not changed since then. In the near future, they will be doubled -
up to $500 for machines and $5,000 for a gambling table.
It is quite logical that the bill bans gambling facilities in dwellings and administrative buildings, near educational, medical and child-care establishments. Machines will be outlawed at all municipal transport stops. The government is also planning to control gambling software and bring the guaranteed gain of the clients to 80%.
The production of gambling equipment has been licensed in Russia for the past year. But with the adoption of a federal law on amendments in licensing March 10, a moratorium has been imposed on licensing and sale of gambling equipment until August 1, 2006, because the government has not yet drafted the required delegated legislation. As a consequence, all those who have been involved in the gambling business for an extended period of time are criminally liable. They have been left outside the law until August. The Ministry of Industry and Energy will be in charge of issuing licenses for them.
Recent amendments to the advertising law have also dealt a heavy blow to the Russian gambling business. The law has prohibited any promotion of gambling clubs, non-government lotteries and games of chance and bets. Now they can advertise only on the walls of their own buildings.
The bill presented by Duma deputies Andrei Samoshin and Alexander Lebedev suggesting that all gambling establishments be kept outside any population centers, as is the case in the majority of countries, has been rejected for the time being. But deputies in the Moscow City legislation are discussing banning gambling from Moscow altogether. Moscow Mayor YuryiLuzhkov favors a radical solution to the problem. Gambling has been banned in some regions altogether, for instance, in Chechnya.
A long-awaited onslaught on gambling has been launched. The ultimate goal is to turn it into civilized business under government control. This will contribute to the moral standards of Russian society and be a gain for the economy.
