June 29, 2009 / 8:14 PM / 9 years ago

Russia's casinos to close, thousands lose jobs

MOSCOW (Reuters) - Russia’s plan to close gaming halls, from gaudy casinos crowned by extravagant neon structures to dingy dwellings containing a handful of slot machines, could turf a third of a million people out of work this week.

“I’ve got 800 staff looking at me every day for inspiration and hope,” said Clive Tilley, who runs the 70-tabled Casino de Paris, Moscow’s largest gaming complex where gamblers play under vines in mock French courtyards.

“With the economy as it is now, it’s not the time to pound the streets looking for work. It breaks my heart.”

From July 1, the government plans to replace the casinos and gambling halls with Las Vegas-style gaming zones in four rarely visited regions considered in need of investment, including one near the North Korea border.

Prime Minister Vladimir Putin came up with the idea in 2006 when he was president after the Interior Ministry linked several gaming operations in Moscow to a Georgian criminal organisation.

The development zones — in the southern Krasnodar region, the Baltic enclave of Kaliningrad, east Siberia’s Altai region and the Far Eastern port of Primorye — require investment of $23 billion (13.8 billion pounds) and have not been built.

The Russian capital has around 550 places where you can gamble, including 30 casinos which have become synonymous with Moscow’s love of excess and occupy prime spots across the city.

Critics of the government plan, which will cover Russia’s 11 time zones, say it is doomed by a lack of investment.

“This is a dead unrealistic idea,” said Samuel Binder, deputy executive director at the Russian Association for Gaming Business Development, an independent monitor.

“It’s preposterous to think these replacements could be up and running soon... Even those who have investments for gaming have realised they’d rather take their money elsewhere in the ex-Soviet Union or to Latin America.”

LAID-OFF WORKERS

Tilley, a 50-year-old Briton who has been in the casino business for 30 years, will take some staff with him to Montenegro where he will set up post-Moscow. His luxury hotel partnerships in Russia will also suffer, he said.

“Finding a job is all we think about. Especially with this crisis on,” a security guard in his early 30s at a Moscow gaming hall said, speaking on condition of anonymity.

Unemployment in Russia is already at an eight-year high and industry bodies estimate 300-350,000 jobs are at risk.

Deputy Moscow mayor Sergei Baidakov says only 11,500 workers will become unemployed across the country, half of them in the capital. Those laid-off will find work in the restaurants and shops that will fill the spaces left by the gambling establishments, he said.

“The damage to the health of people and society would be a far greater figure than the money lost in the budget (from gaming taxes),” Baidakov told Reuters. Russia’s gaming industry brings in up to $7 billion a year and pays $1 billion in taxes.

A 42-year-old Muscovite gambler, stuffing a 500 rouble (9.70 pound) note into a slot machine in a smoky hall, said he will miss his passion: “I’ve played every day for five years.”

SPECIAL GAMING ZONES

Kaliningrad, wedged between Poland and Lithuania and annexed from Germany after World War Two, is to have 10 casinos — the most in any of the zones.

“There has not been a single concrete proposal. Seventy percent of the Kaliningrad population is against it,” said Solomon Ginzburg, a deputy in the regional Duma.

He said casinos will operate underground after the ban, as in the Soviet era when almost all gambling was illegal but took place in homes or cellars.

Moscow city police say they will raid any gaming halls in the early days of the ban.

“It (the ban) will create bandits and gangsters, of course it will. You think people will not do it anyway under a disguise?” said the Russian gaming association’s Binder.

Baidakov said the government will be up to the challenge.

“There is not one metropolis in the world which has a regulated gaming business that has not managed to overcome attempts by gaming owners to go underground.”

Reporting by Amie Ferris-Rotman; editing by Robert Woodward

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