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After plans to introduce casinos to Crimea, Putin approves gambling zone in Winter Olympic resort. EurasiaNet.org report.
Can Sochi take the Black Sea casino crown? Photograph: JACQUELINE LARMA/AP.
Paul Rimple for EurasiaNet.org, part of the New East network
A decade ago Sochi was just another dilapidated holiday destination but the 2014 Winter Olympics transformed the Russian resort, which now hopes to become the Monte Carlo of the Black Sea.
The plan to bring gambling to Sochi is a surprise addition to Russia’s move to allow casinos in Crimea: the peninsula, annexed by Russia in early 2014, experienced an economic crash and officials hoped that casinos could help with recovery.
Sochi is also looking for money to pay the bills from its Olympic makeover and the state-owned Sberbank – which has a 92% stake in one of Sochi’s proposed gambling zones Krasnaya Polyana – had been lobbying for a gaming license to help recoup tens of billions of roubles it invested in the city for the winter games.
The Russian president, Vladimir Putin, who had originally opposed gambling in Sochi, had a change of heart and approved the new gambling zones earlier this year.
Russia cracked down on the industry in 2009, restricting casinos to four far-flung areas: Yantarnaya in Kaliningrad, Altai in central Siberia, Primorye in the far east, and Azov City in Krasnodar.
The 2009 restrictions had created an opportunity for Georgia to establish itself as a gambling hub, buoyed by the fact that gaming is prohibited in neighbouring Azerbaijan and Turkey and restricted in Armenia. But just as it starts to make solid contributions to Georgia’s struggling economy, it faces a challenge.
Sochi could be the largest threat to Georgia’s industry since 2013, when parliament introduced a bill to ban gambling. The Orthodox Church, the country’s most influential institution, is also opposed to the spread of casinos.
But Georgian MPs understand the significant contribution casinos make to the state’s coffers. In 2013 Georgia generated nearly 105.26 million lari (£36m) in 2013 from gambling taxes, about two percent of the the state budget, according to the State Revenue Service.
For the past nine year the Black Sea port of Batumi, 370km south of Sochi, has been the centre of gambling in Georgia, as the operating costs are lower than in the capital, Tbilisi.
Casinos in Tbilisi face one of the highest annual license fees in the world: 5 million lari. By contrast Batumi casinos only have to pay 250,000 lari. Anyone building a 100-room hotel with a casino is offered a 10-year freeze on annual license fees. The port has five casinos, with two more slated to open next year.
Russian high-rollers go to Macau or Monte Carlo
Mehmet Esen, finance director of Batumi’s Peace Casino, said he was not concerned about the competition as Russians only make up a small percentage of Georgia’s gamblers. Most come from Turkey or Azerbaijan, and there is a growing number from Iran. “Russian high-rollers go to Macau or Monte Carlo,” he said.
If Russia were to become serious competition for Batumi, it would have to implement a sound gaming law and somehow change its negative gaming reputation, he added. Gambling is largely unregulated in Russia and has a reputation of being connected to organised crime.
At a two-day gambling industry conference in Sochi, Mustafa Yilmaz, a director at Princess Casinos International, which operates casinos around the world, said the Russian resort could attract some of Georgia’s Azerbaijani and Turkish clients. Turkey currently enjoys a 30-day visa-free regime with Russia. Azerbaijanis can stay in the country for 90 days visa-free.
Batumi’s tourist season lasts only a few months in summer but Sochi attracts visitors in both summer and winter, Yilmaz added.
But a lack of strategy for Sochi’s gambling sector leaves Yilmaz and other casino investors with more questions than answers: nobody knows whether the planned gambling zone will be at the Olympic Park media centre, 30km from the city centre or the Olympic alpine site of Krasnaya Polyana, 67km away.
Conference attendees also said they are still unclear about the tax rates, the number of licenses that issued and how the casinos will be regulated.
“It’s a big if; a big blank. We don’t know anything,” Yilmaz said.
Ultimately, whether or not Georgia’s gaming industry suffers from Sochi casinos depends on the scale of investment and services there, said Ian Livingston, managing director at the Casino Adjara in Tbilisi: “If Sochi were to develop to such a degree as to be a mini-Vegas, then we feel it might draw some of our foreign players from surrounding areas,” he said.
Gambling experts agree that this will not happen soon: “you need a few years just to start and it will take them one year just to figure out the legal questions,” said Darren Keane, chief executive officer of Storm International, a major gaming-industry player which operates in Tbilisi and Moscow.
Suren Gazaryan of the Environmental Watch on North Caucasus looks at waste close to the 2014 Sochi construction site. Photograph: Mikhail Mordasov/AFP/Getty Images
Criticising Russian state projects and the destruction of the environment leads to police intimidation, trumped up criminal charges and prison, says a green activist forced to seek political asylum in western Europe after protesting against a luxurious mansion being allegedly built for Vladimir Putin and the destruction of protected wilderness for the winter Olympic games in Sochi.
“It has become almost impossible now to object to grand projects which have the authorities behind them. People are threatened and intimidated,” says zoologist Suren Gazaryan, who on Monday won a $175,000 prize in the Goldman awards, the equivalent of a “green Oscar”. He is now in Germany after receiving political asylum in Estonia.
Gazaryan, with other members of Russian ecological group Environmental Watch on North Caucasus group (EWNC), has been a leading critic of the developments along the Black Sea coast and of the corruption surrounding the Olympics. In the runup to the Sochi games last year, the group issued photographs of the damage created by new roads and building in the national park and the Caucasus reserve. “There has been massive destruction of natural landscapes,” he says. (more…)
Vladimir Luxuria, center, a former Communist lawmaker in the Italian parliament and prominent crusader for transgender rights, is led away by friends to attend a women’s ice hockey match after posing for photos on the Olympic Plaza at the 2014 Winter Olympics, Monday, Feb. 17, 2014, in Sochi, Russia. Luxuria was soon after detained by police upon entering the Shayba Arena. (AP Photo/David Goldman)
SOCHI, Russia (AP) — The International Olympic Committee on Tuesday defended the removal of an Italian gay rights activist from a Sochi arena, saying she was “escorted from there peacefully” and not detained.
Former Italian lawmaker Vladimir Luxuria was taken away by four unidentified men in a car with Olympic markings as she tried to enter an arena Monday night for a women’s hockey game.
Luxuria, dressed in rainbow colors, had been walking around Olympic Park for nearly two hours, accompanied by a scrum of reporters. Most of the Russian spectators seemed clueless about the gay rights message and some approached her to take a picture, thinking she was a carnival character. (more…)
Vladimir Luxuria, a former Communist lawmaker in the Italian parliament and prominent crusader for transgender rights, walks in Olympic Park at the 2014 Winter Olympics, Monday, Feb. 17, 2014, in Sochi, Russia. Luxuria said she was detained by police at the Olympics after being stopped while carrying a rainbow flag that read in Russian: “Gay is OK.” Police on Monday denied this happened. (AP Photo/Steve Barker)
SOCHI, Russia (AP) — An Italian gay-rights activist has been detained by Russian police as she entered Shayba Arena at the Olympic Park to watch a hockey game.
Vladimir Luxuria, a former Communist lawmaker in the Italian parliament who has become a prominent transgender rights crusader and television personality, was led away by four men while shouting “I have a ticket.”
A few minutes later she was put in a car and driven away.
She had been walking around the Olympic Park for about two hours in a rainbow-colored outfit and a huge headdress. She had been shouting “Gay is OK” in English and Russian.
Luxuria earlier said she was detained on Sunday evening by police who told her she should not wear clothes with slogans supporting gay rights. Police denied detaining her.