All Bets Off for Russia's Casinos?

MOSCOW, July 3, 2009 — -- In one fell swoop this week in Russia, more than 400,000 casino workers lost their jobs and joined the growing number of unemployed as the country's economic crisis deepened.

At midnight Wednesday, the neon lights of casinos and gambling halls across Russia were turned off and taken down, the roulette wheels stopped spinning and the din of coins spilling into the slot machine wells ceased.

The July 1 closure of all Russia's gambling facilities is the result of an anti-vice law pushed through in 2006 by then-President Vladimir Putin (now Prime Minister) that few thought would ever actually result in the casinos being shuttered. At the time, it helped Putin bolster his image as a clean-living, workaholic president as well as deal with concerns about crime in the industry.

Current president Dmitry Medvedev upheld the law, resulting in the shutting down of 30 major casinos and 500 gambling halls in Moscow alone Wednesday. Police patrolled the capital, making sure the businesses were heeding the government's decree.

However, the government did have a counteroffer: to create four development zones around the country where casinos could be built. The problem is these zones are in some of the farthest reaches of Russia: the mountainous Altai region of Siberia, along the Pacific coast in the Far East near North Korea and China, the Kaliningrad enclave on the Baltic Sea, and the southern Azov Sea region.

Several casinos are expected to reorganize, becoming smaller poker clubs, which are still legal, they bring in far less money and employ fewer people. The vast majority of those who worked in gaming now have to look elsewhere to pay the bills. Officials have tried to tamp down the anger of former casino employees with promises of new jobs in the service industry, but the newly unemployed remain skeptical.

"I am very worried," said Mikhail Smirnov, the 36-year-old former manager of Moscow's Casino Bakara and the father of three young children. "I have to change my life completely. I have to look for a new job, as I have three kids who depend on me."

After 14 years in the casino business, Smirnov was one of those who never thought the closures would actually happen and didn't bother looking for another job. Now, he says, his children will lose their health insurance, and he'll have to use the money he put aside for their education. He added that almost all his former colleagues have unpaid loans.