Casinos in Russia

Introduction

The picture of land casinos in Russia is unique and unlike any other in the world. Gambling is allowed but only in designated zones and under strict regulations. Casinos are something most of us simply don’t think of when Russia comes to mind. Depending on our perspective or biases we might think of the deep history, cultural icons, or architecture in places like Moscow or Saint Petersberg, or reflect on the fact that Siberia makes up about three-quarters of the vast and diverse country’s landmass footprint.

The gambling zones in Russia came to be after legal changes in 2009. The government decided to create four specific areas to shoehorn the industry into to control a widespread, crime-laden, mostly unregulated industry. One of the reasons given at the time was to minimize gambling-related social issues. That term can be broad in a place governed the way the Russian Federation is.

The legal casino zones offer a few luxurious resorts that are designed to attract Russians and international visitors. The casinos have traditional gaming and offer international high rollers high-end hospitality and entertainment experiences. Russian-style luxury can now be found outside of the iconic, historical cities in a new way.

Stick around and in this review, we’ll look at the history, legal framework, popular gaming destinations, and the types of games players can find in Russia’s casino resorts.

History of Gambling

Russia and gambling have not always walked hand in hand or arm in arm over the centuries. Under Peter the Great in the early 1700s gambling was tolerated for the most part but as it became more widespread heavy regulation followed in kind. More recently, the Soviet-era mindset saw gambling as a capitalist endeavor, and as such it was summarily banned in almost all forms. After the Soviet Union was dissolved in 1991, Russia saw a virtual explosion of casino openings and a great number of them were in the bigger cities like Moscow and St. Petersburg. But alas, concerns over unregulated growth and social impacts triggered big changes in 2009 when the government restricted gambling to specific regions.

This decision was part of an effort to centralize government control and purportedly to develop a safer gambling environment. Russia designated four legal zones and then added another after invading Crimea. The gambling zones of Altai, Krasnodar, Kaliningrad, and Primorye are all located far from the main population centers. Crimea has been on hold since 2020 with no development expected any time soon.

Legislation and Jurisdiction

Russia’s gambling legislation is strict and it focuses on control and responsibility. The Russian government established federal oversight to regulate land casinos in 2009 and began moving them to designated zones away from Moscow and other heavily populated areas. The government seems to have seen the move as the only way to control the collection of revenues from the venues and to exert greater control over casinos overall, including the ability to control illegal gambling and all the problems that can be associated with it.

Local authorities oversee the gambling zones while the Russian Federal Tax Service and Ministry of Finance control licensing, compliance, and enforcement of strict standards..

A few legal developments over the years have addressed things like advertising and various compliance issues. Strict penalties are applied on any operator who is caught offering services outside the designated zones and that includes online casinos which are illegal in Russia. The host communities also get a portion of the casino revenues to help support infrastructure that might be impacted and social services.

Popular Spots and Games

Let’s take a look at the gambling zones of Russia. The Primorye Integrated Entertainment Zone (PIEZ) near Vladivostok was meant to be the flagship gaming destination hyped as a “mini Las Vegas” in Russia’s Far East. Tigre de Cristal was developed by Melco Resorts and Entertainment and opened in 2015 as the first casino resort in the zone. Melco invested about €158.6 million in the casino which was planned to be the first of 11 mega-plexes in the PIEZ,

The casino expected to attract tourists from nearby and neighboring countries in the region like China, Japan, and South Korea. Projections from a 2012 feasibility study by Global Market Advisors pointed to Primorye gaming revenues eventually reaching €46 billion. Those rosey numbers never came to be.

The property hit roadblocks and Melco’s founder, Lawrence Ho, divested his majority stake in 2017. That led to slower rollouts of the zone’s other developments. Then the pandemic further threw its own wrench into the works when Tigre de Cristal temporarily closed in 2019. More recently, Russia’s war with Ukraine has further disrupted Primorye’s long-term plans. With wartime sanctions in place, LET Group Holdings and its subsidiary Summit Ascent Holdings, now the owners of Tigre de Cristal, have tried to offload the property thanks to increased risks and uncertainties tied to Russian investments. A deal was nearly secured in January 2023 to sell G1 Entertainment, Tigre de Cristal’s operator, to Russian company Dalnevostochniy Aktiv for €107 million. However, the buyer backed out in February, leading to turmoil within Summit Ascent, with five out of six board members resigning in protest. In August, an extraordinary general meeting (EGM) was planned to discuss new sales strategies. In early 2024, the Hong Kong stock regulator warned that it might delist LET Group and Summit Ascent over concerns about the sale of Tigre de Cristal.

ShambalaResort Casino opened in Primorye in 2020. Both resorts have stopped expansion and development plans for now. Another major project from Asia-Invest Group is still being considered but Cambodian operator NagaCorp’s plans for a Primorye resort ground to a halt after the Ukraine invasion. It’s unclear if any more development will take place in the zone.

The Krasnaya Polyana zone in Sochi and Yantarnaya in Kaliningrad Oblast continue to operate, and the Siberian Coin is a gambling zone in the Altai Territory. Altai Palace Casino may or may not be in operation as the hotel web page no longer mentions the casino and its Facebook page was last updated in January 2023.

Conclusion

Russia’s land-based casino industry has an interesting history and has now evolved into a unique network of gaming zones. While it may have looked like they were onto something with mega-developments like those in Primorye, factors outside the control of casino operators have dealt the industry crippling blows in terms of becoming the new Macau or Las Vegas. Sanctions or the fear of them have intensified the lack of certainty and driven away investment while investors like LET Group Holdings simply want to get out of the market due to those and other risks.

Other zones like Krasnaya Polyana in Sochi and Yantarnaya in Kaliningrad continue to operate and seem to be attracting visitors - but nothing like the numbers that were expected under the gaming zones plan.

Russia’s casino industry is in a state of flux without much hope for attracting the sort of investments in capital and management that would be needed to make it come close to meeting some of the original goals. If a post-conflict era comes to pass, a once-bitten, twice-shy industry may or may not want to participate in Russia unless another type of political stability also comes to pass.