Gambling Surges in Russia Despite Ban

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MOSCOW - (Associated Press) - Moscow authorities expressed concern Monday about the rise of "surrogate" gambling technologies such as lottery machines and online gambling three months after an almost total ban on gambling in Russia.

"We are seriously concerned about the rise of surrogate technologies," Moscow deputy mayor Sergei Baidakov said at a news conference. "They are the byproduct of imperfect legislation."

He said about a third of Moscow's 525 casinos and slot machine halls have opened "lottery parlors" to sell instant lottery tickets, while the number of Internet cafes providing access to online gambling resources has risen threefold since July.

Since July 1, gambling has been confined to four far-flung special zones.

Government pressure to crack down on gambling began in 2006, when then-President Vladimir Putin pledged to root out the industry whose effect on Russians he compared to "alcoholization" of the country.

Baidakov said the budget had suffered little from the disappearance of gambling, with tax revenues down 0.5 percent.

"It's nil compared to the benefits to the health of the nation," he said.


He also downplayed the impact of the industry shutdown on unemployment, saying that about 1,500 former casino employers in Moscow have registered as unemployed and secured government handouts.

Casinos multiplied in Russia after the 1991 Soviet collapse, and slot machines quickly spread beyond gaming halls to shops and malls. In 2008, the industry as a whole provided 400,000 jobs and had a turnover of $3.6 billion.

Moscow authorities are continuing to search out illicit casinos and slot machine halls.

Police seized 33 slot machines late Sunday, and have shut down 35 underground casinos since the legislation passed, deputy Moscow police head Viktor Vasilyev said.

Moscow city lawmaker Inna Svyatenko said city and federal authorities would close the legal loopholes that allow online gambling and the unrestricted sale of lottery tickets.

As of July, casinos and slot machines have been restricted to the Western exclave of Kaliningrad, the Primorsky region on the Pacific coast, the Altai region in Siberia and near the southern cities of Krasnodar and Rostov. No casinos have opened there yet: Potential investors say the zones are too remote, their infrastructure too underdeveloped.

In Moscow the glittering casinos and slot machine halls that once exemplified Russia's post-Soviet embrace of Western habits have made way for restaurants, shops and fitness clubs.

A spacious former slot machine hall near the Kievsky railway station in central Moscow has been split into a fast food outlet, a bureau de change and a cell phone store. Vendors from nearby shops hailed the removal of the one-armed bandits - and obsessive and often drunk gamblers who would typically hover nearby.

"It's a lot quieter here now, after all those weird gamblers disappeared," said Alexandra Tarpischeva, a saleswoman at a deli next door.


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