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Russia Moves To Make Crimea Gambling Zone

Published 04/21/2014, 07:48 AM
Updated 04/21/2014, 08:00 AM
Russia Moves To Make Crimea Gambling Zone

Russia Moves To Make Crimea Gambling Zone

By Sneha Shankar - Russian President Vladimir Putin presented a bill to the Duma, the lower house of the parliament, to declare the Republic of Crimea as the fifth state to permit gambling in the country.

While Russia wants the casinos to be located in a single gambling zone, the bill states that local authorities will set the borders of such a zone within the country. In 2009, Russia had banned the setting up of casinos outside four designated zones, which are presently in the Altai and Maritime territories, in the Kaliningrad region and at the border between the Krasnodar territory and the Rostov region.

© Reuters/Maxim Shemetov. A man walks past a Raiffeisen Bank Aval cash machine in the Crimean city of Simferopol on April 5, 2014.

According to ITAR-TASS, a local news agency, only the Kaliningrad region gambling zone has been successful and the government now plans to expand it by another 100 acres. And, though Russia's leaders were not supportive of organizing a gambling zone in the resort town of Sochi, which recently hosted the winter Olympics, the idea to organize one in Crimea was reportedly welcomed by federal authorities. In 2009, the Russian gambling industry was estimated to have generated worth $5.5 billion in annual revenues with tax payments amounting to $480 million, according to ITAR-TASS.

Meanwhile, the Bank of Russia reportedly said in a statement that it has blocked four Ukrainian banks from operating in Crimea stating that they have failed to meet their obligations to creditors and depositors, the Financial Times, or FT, reported.

Privatbank, Vseukrainsky Aktsionerny Bank, Bank Kyivska Rus and Imexbank will not be able to conduct any business other than asset transfers, the report said, adding that the Russian government, which is looking to complete the transfer of Crimea into a Russian territory, also wants to change the local currency from hryvnia to rubles.

More than 20 Ukrainian banks were operating in Crimea before its annexation by Russia, with close to a thousand branches in the region. However, most of the banks have since pulled out of the region voluntarily and have stopped allowing withdrawals, leaving many locals with little access to banking services. Russia reportedly tried addressing the issue before complaining of an unresponsive regulatory authority in Ukraine, FT reported.

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