Russian Oligarch Pleads with Vladimir Putin to Save Azov-City Casinos

Posted on: October 12, 2017, 04:00h. 

Last updated on: October 12, 2017, 04:00h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Maxim Smolentsev, president of the Shambala Casino in Russia’s doomed Azov-City casino zone, has written an open letter to President Vladimir Putin, with excerpts printed Wednesday in Betting Business Russia, begging him to reconsider the decision to “liquidate” the area’s fledgling casino sector.

The government in Moscow has told Azov-City’s three casinos that they must close by Jan. 1, 2019, to make way for the establishment of a new gambling zone in nearby Sochi.

Russia launched a major crackdown to take control of gambling in 2009, closing down casinos, card clubs, and slot parlors in all its big cities, exiling all gambling activity to four far-flung economic zones. The designated destinations were Azov City in the Krasnodar region, Primorye near the Pacific port of Vladivostok, Kaliningrad on the Baltic Sea coast, and Altai in Siberia.

Sochi’s Rise, Azov-City’s Fall

Since the 2009 establishment of casino zones, Azov-City was the only one to have any casinos up and running at all, until the opening of the Tigre de Crystal in Primorye in late 2015.

But also in that time, Sochi had been transformed by the 2014 Winter Olympics from an all but abandoned resort on the Black Sea to a more polished international tourist destination. With the government wanting to capitalize on Sochi’s status as a host city for the 2018 FIFA World Cup and a Russian Formula 1 Grand Prix, Sochi’s first casino resort opened in January 2017.

Azov-City, meanwhile, would become collateral damage.

“I’m sure you do not want more than 2,000 Russian citizens to lose their jobs, and the budget to lose 400 million rubles in taxes,” Smolentsev wrote in his letter to Putin. “I am convinced that you do not need a social implosion in the Krasnodar Territory, impoverishment and bankruptcy of thousands of families.”

Government officials in Moscow did say the three casinos would be compensated for the inconvenience.

Over One Million Served

Smolentsev’s company, CJSC Shambala, has recently pledged to build a casino in the Primorye zone in Russia’s far east, near its borders with China and North Korea. It’s an area to which the government has been desperate to attract investment, and Smolentsev such interest could buy him some leverage with the Kremlin.

“We are in solidarity with you in building a strong economy, a just society and a great Russia,” his letter continued. “And Azov-City is a unique example, when a new resort city began to appear in the open field thanks to the joint work of the state and business.”

The appeal to Putin to reconsider his decision about the gambling zones gives insights into the world of negotiations between the Kremlin, regional leaders, and Russian oligarchs.

“Now five-star hotels, restaurants with chefs of high class, [and a spa] center are already built here,” Smolentsev said. “In Azov-City, weekly, stars of the domestic stage of the highest caliber perform. Over the entire period of the resort’s existence, more than one million people have already visited it.”

The plea was simple from someone not wanting to see a project built over the better part of a decade suddenly abandoned, the way Sochi was prior to the Olympics. Though perhaps something’s been lost in translation, Smolentsev’s rhetoric seemed rather pointed in its criticism.

“Eight years ago, we, the Azov-City investors, were persuaded to believe in the very idea of ​​gambling zones. We were promised all possible assistance and even guaranteed the gambling zones would be left untouched for 50 years. In fact, we were deceived.”