Russian Casino and Card Room Gaming

Until 2006, the casino industry in Russia was largely unregulated. Casinos were illegal during the vast majority of Russia's Communist rule. The first casinos opened in 1988 and operated out of hotels catering only to foreigners. It is estimated that there were over 100 casinos and over 3,000 gaming halls in Moscow alone at the height of this gaming boom. Rapid growth of the casino industry in the 10 years before 2004 drew government attention, and in January of that year, the power to tax gaming establishments was granted to regional authorities.

In December 2006, the Russian president passed a casino bill to control the growth of the industry. The law established a minimum age of 18 years for gambling, outlawed online gambling, and limited casinos to four gambling zones in which casinos and slot halls were ultimately concentrated. The bill had two parts. Part one established standards for casinos, such as minimum capitalization and space and facility requirements. This section went in effect in July 2007, and casinos that didn’t meet the minimum requirement had to shut down immediately. The remaining casinos had until July 2009, when the second part of the bill went into effect, to cease or move operations to approved zones. Some local governments took the initiative and began shutting down smaller properties almost immediately after the passage of the bill. It is estimated that over 2,200 Russian casinos were closed in 2006 as a result of this law.

In July 2007, the first part of the casino bill went into effect in 38 regions. Under this law, punishment for operating an illegal gambling hall is a fine of 3,000-12,000 rubles (USD 100-400).

In January 2008, local officials closed over 300 slot machine halls in St. Petersburg. Regional legislation supplementing federal law prohibited slot halls in the city, and casinos were permitted to continue operating until 30 June 2009.

In December 2008, government officials announced that more than 1,000 casinos with assets of less than USD 23 million had been closed in Moscow as a result of the new law.

The four original casino zones were located in the city of Kaliningrad and in the regions of Primorsky Altai and Krasnodar/Rostov. In spring 2011, the Russian government passed a law changing the location of one of the gambling regions. Rostov was excluded, and the zone was moved farther south to the Anapa region, which sits on the coast of the Black Sea. In July 2014, Russia legalized gambling in two more zones: Sochi and Crimea. And in early 2015, Russia informed businesses of Azov City, the first functioning gambling zone in Russia, that the region would be liquidated.

Casino operators need to apply for licenses to move their businesses. The zones are strictly enforced, and after 1 July 2009, casinos and slot halls operating outside the zones were forced to close.

In May 2007, Russian Sports Minister Vyacheslav Fetisov classified poker as a game of skill rather than a game of chance under the authority of the casino bill. This classification would have allowed card rooms to operate freely without adhering to the geographical restrictions placed on casinos once the ban went into effect. To prevent casinos from operating as poker clubs, the Sports Ministry changed its stance and excluded poker from its official list of recognized sports in July 2009.

All casinos in Russia closed in July 2009 when the ban went into effect. The first legal casino to open after the ban was Casino Oracul, which opened in January 2010 in the area that would become Azov City.

In February 2016, the Ministry of Finance suggested it was considering a tenfold increase in taxes on gambling operators. Under the plan, Russian casinos would see taxes increase to 75,000 rubles per month for each slot machine (up from 7,500 rubles per month), and 1.25 million rubles per month for each gaming table (up from 125,000 rubles per month), however no changes in gambling taxes had been made yet.

In April 2016, casinos in the Azov-City gaming region were ordered closed by 1 January 1 2019 as a way to steer the gambling public to the new Sochi gaming region, where the government needs to recoup massive financial losses from the 2014 Winter Olympics, and the newly created gambling zone in Dagestan.