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 "The economics of moving the current business to zones that nobody is going to, are disastrous"The questions of "Vremia Novostei" are answered by Michael BOETTCHER - President & CEO of Storm International (casinos "Shangri La", "Udarnik", Super Slots). --Is it possible that the creation of the zones can become a successful business-project? Why? --The concept of zones is not new and I can see how someone thought this would be a good idea based on their limited knowledge of the gaming industry. I can only assume that whoever came up with the idea was thinking about The zones that have been proposed have insufficient infrastructure in the form of gas, electricity, water, roads, airports, housing, medical facilities, security or even people to work there. There has been no feasibility study done and only recently a study that was requested by the President`s Administration (completed by someone with no gaming expreience) recommended that it would take a minimum of three years and eight months to open any kind of facility in the most favourable zone. Other zones would take years longer to meet the requirements of a prospective operator. Not one casino gaming operator has expressed any interest in going to the zones and although a big international gaming operator, Sun International, was invited to one of the regions, they have clearly decided not to take part in this ill conceived project. No-one in this industry is prepared to risk investing billions of rubles into these zones without an equally huge investment by the authorities who are responsible for these zones, something that is unlikely to happen. That money could be much better spent elsewhere on social services and the needs of the community. --Are there opportunities that the prohibition of gambling in the cities can result in a massive illegal gaming business? --In every jurisdiction where gambling has been banned or restricted, illegal gaming has immediately taken over the industry. Since gaming was made illegal in While there is no question that there are a minority of people who become addicted to gambling, it is a fact that 6% to 8% of the population of the world is compulsive/addictive in one way or another and no legislation will ever change that. In all jurisdictions where gaming has been legalized and controlled, the community has benefitted in the form of the creation of employment, tax revenues to the state, an increase in visitors to those areas, improved social services and the protection of the gambler in the form of proper laws and legislation. In addition, most jurisdictions insist on gaming operators adopting Responsible Gaming Programmes, something we already do in I have worked in the gaming industry for over 34 years and have always heard claims by those who have never been in a casino of the link between gaming and drugs, prostitution, money laundering and crime. However, having worked in --Is an average casino-visitor ready to travel so far away to gamble? --We have, of course, polled our existing customers regarding this issue and the overwhelming response is that they would not travel to faraway zones but rather gamble in illegal casinos or take their money out of Gambling is a form of entertainment, more like bars and clubs, which, if they were all moved to zones would expect a similar response - raise of illegal operations. --What is in your opinion the initial goal of adopting the law of moving all gaming business to the zones – economical or moral? I can honestly say that the industry was very much in need of proper control and the more responsible owners in the industry had been pushing for new legislation for many years, which was finally introduced at the beginning of 2006 and debated in the Duma over several months. There was some legislation that was recommended that would have properly controlled the industry, especially in respect of controlling and closing the proliferation of seedy slot halls around the city and the country but the law became diluted through lobbying and the President`s Administration stepped in, quite rightly, to make the laws more strict. Unfortunately for us all, they went too far with the concept of zones and now we are in turmoil as a result. I believe that their are moral issues but that the new proposals are more to do with proper control and legislation as the government endorses lotteries and horse-racing which are also gambling. The economics of moving the current business to zones that nobody is going to, are disastrous. 500,000 jobs would be lost - Storm International alone employs over 6,000 personell. Our industry employs Food & Beverage personnel, accountants, entertainers, security personnel, drivers, lawyers, trainers, housemasters, design and development experts, marketing and advertising specialists, computer specialists, administrators and Human Resource personell as well as many others. Billions of tax rubles would be lost (illegal casinos do not pay taxes but rather have to pay corrupt bureaucrats)and the players now contributing to the economy would take their disposable income out of the country. --Is there gaming business market redistribution expected in conjunction with the adopted law? --When speaking to other operators, I have understood that as no-one is interested in going to the zones, we will all simply close our doors as demanded and shut down the business. Many Russian operators are looking around the world to move their established business and Russian management to jurisdictions where gaming is properly legalized and controlled and where we will be welcomed. Indeed my company, Storm International, is doing just that, in some cases in partnership with other existing Russian owners. We already have possibilities in countries in the former Soviet Union as well as the Far East, the I would like to see a dialog between business and government, where the owners and management are consulted by the Federal Government, as was done in Moscow recently, I am sure that we could have come up with an equitable solution for all, based on existing legislation around the world and by compromise. Unfortunately that has not yet happened but there is still time and it is my fervent hope that reason will prevail and that the laws may yet change. The `zones` are not the answer. Daria GUSEVA, Irina SKLYAROV Source: "Vremia Novostei", #120, 11 July 2007 |  |  | 
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