Sochi Turns to Gambling Post-Olympics 2014

Sochi Olympics

On July 4, the Russian Parliament voted to convert Sochi, the Black Sea venue for the 2014 Winter Olympic Games, into a gambling zone. According to Deputy Prime Minister Dmitry Kozak, State Duma made the decision to improve the financial models of the now-redundant sporting facilities, which were funded by bank loans.

Where are the existing gambling centers?

In 2009, numerous casinos were shut in the wake of Russia’s tightening of gambling laws. The government permitted just four gambling zones in the southern, eastern and western regions of the country. Of these, only one, Azov City, remains open. Casinos in three other gambling zones in the Republic of Altai, Krasnodar and Primorye region have been under construction for the past five years.

What next for Azov City?

Azov City has three casinos on the shore of the Azov Sea near the southwestern border with the Ukraine. Russian law may force the Azov City gambling zone to be shut down to make way for the new casinos at Sochi, however this is still being discussed.

A new look for Crimea

State Dema also voted to allow Crimea to create a gambling zone, bringing jobs and investment to the region and topping up the annual revenue base in the local budget by as much as 25 billion rubles (approximately GBP 429 million).

While Crimea are expected to be given free reign over the location and boundaries of the gambling area, Sochi will be more tightly regulated in this regard. For example, casinos will only be allowed in those Olympic facilities that were privately funded. The move will have knock-on effects in areas, bringing in waves of tourists and boosting the hotel and food service industries.

Where did the idea come from?

It was Sberbank chief German Gref who first proposed turning Sochi into the Russian version of Atlantic City or Las Vegas. He broached the subject last winter at a meeting with Prime Minister Dmitry Medvedev, who reportedly lacked enthusiasm for the idea. When the Prime Minister was mistakenly quoted by the Kommersant newspaper as making the initial proposal, one of his representatives was forced to publicly deny it. It is unclear what brought about the change of heart.