Russia Makes Way for Casinos

Russian President Vladimir Putin has proposed a bill to the lower house of the Russian parliament, State Duma, to set up a specifically designated gambling region in Crimea. Now that Russia has legitimately taken over Crimea from Ukraine, Putin has huge plans for the province. He wants to turn the place into a gambler’s delight! If the bill gets approved, Crimea would become the fifth selected gambling region in the Russian Federation, along with the Altai, Krasnodar, Kaliningrad and Primorsky regions. Crimea also holds a special place in the history of Russia as a holiday destination.

How Much is Crimea Costing Russia?

A good amount of monetary problems beleaguered Crimea even before it joined the Russian Federation in March 2014. “During Ukraine’s difficult transition from Soviet Communism, the Crimean economy has suffered from corruption and neglect,” the BBC reported. The region is expected to suffer from a shortfall in budget to the tune of about 55 billion rubles (equivalent to about $1.5 billion). It may receive emergency subsidies worth $2.8 billion from Russia. This is a cost that is not easily affordable by the Russian economy.

What are Russia’s Development Plans for Crimea?

Casinos are widely considered as a great way to cure corruption. This thought may have entered President Putin’s mind when he suggested developing Crimea as the Las Vegas of Russia. The decision has come in the wake of the Russian Federation seeking to make Crimea’s economy self dependent and less dependent on state subsidies or grants. The region would hold no restrictions over the establishment and growth of casinos.

The Russian President and Prime Minister have announced a number of ambitious plans for the development of the Crimean economy. They have left the decision regarding the location as well as the extent of the intended casino zone to the new Crimean authorities.

Gambling was banned across the Russian Federation except in four designated regions since 2009. The proposal of bringing gambling to Sochi, after the city played host to the Winter Olympics was also rejected. Nonetheless, the monetary requirements of Russia’s newly annexed district seem to have triggered Vladimir Putin’s openness to the prospect of having casinos in Crimea. Gambling is taken to be a part of the economic development scheme for Crimea, as the Russian authorities look for measures to make Crimea less dependent on the financial support from the state.

What Could These Development Plans Imply?

The proposed gambling region could bring about a drastic variation in Crimea’s budget, specifically considering the critical part tourism plays in the economy of the region. The solitary running gambling region in Russia, Azov-City, garnered revenues of about 140 million rubles (approx. $3.9 million) in the form of taxes in 2013, out of which 120 million rubles were collected solely from three casinos in the zone. This fact clearly indicates the potential of the proposed plan in Crimea. The Ministry of Regional Development in Crimea has estimated that the creation of an entertainment cum tourism blend in the region could attract an additional 600,000 tourists per year to Crimea, along with Sevastopol making a contribution of around 1 billion rubles (approx. $28 million) to the state treasury.

This proposed plan is expected to make Crimea a financially self dependent region, with casinos being allowed to prosper there.