The Kremlin orders mass gambling industry layoff
Posted by Gavin Smith on 02 Jul 2009 at 09:07
AS many as 400,000 workers in Russia’s gambling industry will lose their jobs this week in a mass layoff ordered by the Kremlin itself.
The New York Times reported on Sunday that under the anti-vice plan that is the brainchild of Prime Minister Vladimir Putin, all legal casinos and slot machine parlours across the nation will be shut down with a move that most thought would never happen.
While layoffs are not uncommon under the current economic climate, they are usually the result of a downturn in profits, but this move is nothing of the sort. Instead it is an initiative from a government which believes that the gambling industry is a dangerous organisation ruled by unscrupulous characters.
Putin first signed the law back in 2006, with a date of July 1, 2009 for the closures, and since then, the casinos have continually request a stay of execution to try and clean up their act.
According to the New York Times, they have also pointed out that the gambling industry pays over $1billion a year in taxes, and that this ban will create serious hardship for the estimated 400,000 workers in the industry.
Anyone who is a fan of the HBO Series The Wire, will remember the story where a senior police officer attempts to solve the drug problem in Baltimore by setting up “safe zones” in the city where drug dealers and users can go about their business without police interference, thereby keeping the rest of the streets clean.
And it seems the Kremlin are also fans of the show, as this is exactly what they are proposing to do to Russia’s gambling industry. The casinos have been told they can relocate to one of four regions in remote areas of the country - the Altai region of Siberia; the Primorsky region near the border with North Korea and China; Kaliningrad between Poland and Lithuania; and the Azov Sea region in the south of the country.
Some of these locations are up to 4,000 miles away from the capital Moscow, and it could take up to two years for any kind of Siberian Las Vegas to become established.
It is less than 20 years since casinos began to spring up across Russia in the post-Soviet era, and many will see Putin’s move as a step backwards.
Irina Mysachka, a 32-year-old single mother who was a supervisor at the Shagri-La Casino in Moscow, told the New York Times: “This is shaking my life to the core — such a blow for me and my family.
“The authorities are taking this step without thinking at all.
“They have not considered what this decision means for the workers. With the crisis, it is going to be very difficult for us.”
The paper also reported that the unemployed Irina would be forced to abandon five-year-old son Yegor with her mother to seek work abroad.
Putin’s right-hand man in this affair has been President Dmitri Medvedev, who last month insisted there would be no leeway in the new legislation.
Quoted by the New York Times, Medvedev said: “The rules will not be revised in any way, and there will be no backsliding, although various business organizations have been lobbying for precisely this.”
The Premier believed that too many people were falling into debt due to gambling, a statement backed up by the fact that the industry in Russia is largely unregulated, with licenses costing as little as $50.
Since 1991, when the Soviet Union fell, gambling establishments have flourished across the country, and there has been much public protest in the past.
While many of the slot-machine parlours had a sordid, dangerous feel to them, that is no different from similar establishments in the West, and in truth the larger casinos had attempted to improve their reputation recently.
Estimates on the number of employees who will find themselves out of work, with the gambling industry saying it will be over 400,000, while the Kremlin says it will be more like 60,000.
While it is likely that neither figure is completely accurate, the actual number could well be at the higher end of the scale, with the New York Times reporting that Storm International, a gambling conglomerate controlled by a British expatriate, employed 6,000 people at Moscow casinos alone.
While the workers are the ones who are going to feel the financial implications keenest, many casino regulars are also shocked that the law has actually come into effect, with people from both sides of the aisle having generally been certain that it would not happen, and if it did, that it would be a diluted version of the original whitewash.
Some gamblers believe that it is an infringement of their rights.
Aleksei Ustinenko, a 29-year-old construction executive playing at Shangri La, told the New York Times: “It is going to be strange, and even now, it’s hard to believe.
“Here we are, in one of the biggest, most beautiful, most expensive cities in the world, and yet other people can decide that I cannot gamble if I want to.”
Putin himself said in 2006: “It is not only young people, but also retirees who lose their last kopecks (Russian currency – 100 kopecks make up a ruble) and pensions through gambling.”
However, despite this claim, it has been suggested that the move might also have been a political one to wound the Georgian community in Russia, who are believed to make up a significant part of the gambling industry. Putin’s plan was originally announced in the midst of a spy scandal between the two countries.
Aside from the four remote locations, the only other alternative for casinos is to adopt games such as private poker, which they believe will be legal, but these do not generate anywhere near as much profit, and thus will not fill many of the jobs lost in the cull.
Work has already begun, with signs being pulled down across Moscow and one-armed bandits being removed from establishments, and for many, the move is seen as a positive one.
Yuri Luzhkov, the city’s mayor, said: “There was a time when all these clubs and casinos grew like a cancer tumor.
“We will close them all. By July 1, Moscow will be clean.”
