CASINO

No compensation for casinos in Russia’s Azov-City gaming zone

TAGs: Azov City, Russia

azov-city-gaming-zone-compensationRussia is promising to compensate casino operators if the government closes any of its designated gaming zones, but the new rules won’t apply to operators in the already doomed Azov-City zone.

Last week, Russia submitted draft legislation to the Duma that would require the government to compensate casino owners if any of the country’s designated gaming zones were closed by the government within 10 years of their creation. The government also pledges to give operators at least three years notice of its intention to pull the plug.

Russia created four new gaming zones in 2009, then banned most forms of gambling outside these geographically isolated regions. The government has since added a new gaming zone in the Crimea, then expanded the Krasnodar Krai region in Russia’s southwest to include the city of Sochi, the site of the 2014 Winter Olympics.

In 2015, the government announced that Azov-City, the Krasnodar region’s original gaming zone and home to three casino operators, would be closed in order to prioritize the Sochi zone. In 2016, Russia extended the Azov-City closure date to January 1, 2019 but continued to ignore pleas from the zone’s operators not to swing the axe.

Making matters worse, Russia’s new legislation specifically exempts casinos in the Azov-City zone from receiving any compensation. That will come as bad news for Russian operator CJSC Shambala, which operates in Azov-City and is building a much larger casino in the far eastern Primorye gaming zone.

The news is more devastating for Avov-City’s other operator, the Royal Time Group, which also had a Primorye project in the works until courts called a halt to the project after it failed to meet its construction timelines, allegedly due to financing issues. Earlier this month, a court in Tatarstan declared Royal Time’s former CEO Rashin Taymazov bankrupt.

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