Putin Tells Russian Casinos to Cash in Their Chips

Michael Boettcher, the British founder of Storm International, a casino group, speaks to the...

Michael Boettcher, the British founder of Storm International, a casino group, speaks to the Associated Press at one of his casinos in downtown Moscow, Monday, June 29, 2009. The government has ordered the closure of all casinos and gambling halls Wednesday, consigning gambling to four special zones in far-flung regions in Russia, some of them several thousands of miles and half-a-dozen time zones away from Moscow. "They've killed the industry overnight," said embittered Boettcher. (AP Photo/Alexander Zemlianichenko)

(AP)

Nearly two decades after the Soviet collapse set Russia's roulette wheels spinning again, Prime Minister Vladimir Putin is calling in the chips on the gambling industry — a symbol of the glitz and excess of Russia's oil-fueled boom.

It's all part of a Kremlin crusade to clean up a country that has long had a fascination with games of chance — and to rein in an industry seen as a breeding ground for corruption and organized crime.

The government ordered the closure of all casinos and gambling halls Wednesday — confining gambling to four special zones in far-flung regions of Russia, most thousands of miles and half-a-dozen time zones away from Moscow.

There is a downside, though. It deprives the federal budget of billions of dollars a year in taxes, while leaving more than 400,000 people without work amid the country's economic crisis.

"They've killed the industry overnight," said an embittered Michael Boettcher, the British founder of Storm International, a casino group that includes the gaudy Shangri-La in central Moscow.

"It's like closing all the five-star restaurants in London because you're eating too much, and saying that if you do want to have them, you'll have to relocate to North Wales," he said. "Who's going to go? Nobody."

More than once Russia has seen officials announce sweeping reforms, only to later back down. So when the gambling law was introduced in 2006, many wondered whether the Kremlin would actually follow through on its threat to pack the $3.6 billion a year gambling industry off to Siberia and other obscure locations.

Many casinos and hole-in-the wall slot machine parlors stayed open until the last possible moment, while the owners of a few gambling dens took the opportunity to expand their business abroad.

"For Rent" signs are up on Moscow's premier tourist boulevard, the Novy Arbat, where the biggest casinos were open for business just days ago. On glitzy Tverskaya Street — Moscow's Fifth Avenue — the Shangri-La was one of the few casinos still doing a brisk trade as customers placed their final bets.