- POSTED: 23 Jul 2014 19:26
Russia designated Sochi and the annexed Crimean peninsula as gambling areas on Wednesday (July 23), in a bid to boost their development with casino revenues. Casinos will be legal in some areas of the former Olympic park in Sochi, and local authorities can designate their own casino zones in Crimea.
MOSCOW: Russia designated Sochi's Olympic site and the annexed Crimean peninsula as gambling areas on Wednesday (July 23), in a bid to boost their development with casino revenues.
Under the law signed by President Vladimir Putin casinos will be legal in some areas of the former Olympic park in Sochi, where Russia hosted the Winter Games in February.
Additionally, the law gives regional authorities in Crimea the right to designate their own casino zones on the peninsula, which Moscow annexed in March after a separatist uprising against Ukraine. The Sochi Games, though widely recognised as a success, cost Russia some US$50 billion (37 billion euros).
Some investors have already complained that the resorts are loss-making, and the Vneshekonombank development bank, which loaned billions of dollars toward construction, has asked the government to bail out its borrowers, Russian media reported recently.
Russia banned casinos throughout most of the country in 2009, restricting them to four areas: the southern Krasnodar region north of Sochi, the Altai mountains, the Far East, and the western enclave of Kaliningrad. They have not been a commercial success due to the remoteness of the areas and a lack of tourism infrastructure.
The legalisation of gambling in Crimea, a peninsula that hosts Russia's Black Sea fleet that many view as a place of military glory, has already ruffled some feathers, particularly in the Communist party which voted against the bill as it passed parliament.
"The gaming business will stimulate nothing but banditry and debauchery, we cannot vote for such laws," senior Communist MP Nikolai Kolomoitsev said during the parliamentary debate earlier this month.
He argued that existing gambling zones were so far a complete failure, and demanded that Crimea instead grow peaches and develop its vineyards. "That's when Crimeans will be glad to return to their Motherland," he said.
Even Putin had previously criticised the idea of installing gambling zones in Sochi, suggesting in February they would scare away families. A casino culture there would "make it hard for people to vacation there as a family with children," he said.
"I think that would be a shame," Putin said at the time.
Crimean officials, however, see casinos as means for economic development.
"The gambling zone should become a sort of engine for the Crimean economy," Deputy Governor Rustam Temirgaliyev told the RBK Daily in April.
"We have ambitious plans, we are counting on our gambling zone becoming a direct competitor to Macau, Monaco and Las Vegas," he added.