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Will Russians Go This Far To Gamble? Don't Bet On It

  • Kevin O'Flynn

Welcome to the Russian Las Vegas.

Welcome to the Russian Las Vegas.

AZOV CITY, Russia -- It takes a bumpy, three-hour drive along crumbling roads to travel from the nearest city to this lonely outpost in the middle of a barren field.

Visitors walk across wooden planks laid down over dug-up earth, as fluorescent-lit palm trees glimmer nearby. The building, squat and ugly, is festooned with blazing lights. Two stray dogs curl up by the entrance, hiding from the howling wind that sweeps in from the nearby Azov Sea.

Welcome to the Russian Las Vegas.

Yury Pozharov is the director of the Oracle, the first legal gaming site built since a Russian gambling ban last year restricted casinos and slot machines to four special zones in far-flung locations. He says since it opened in February, the Oracle draws between 150 and 400 people a day, both locals and out-of-towners.

"There are slot machines, roulette, and cards. The locals mainly play the slot machines," Pozharov says. "Roulette and cards have different stakes, and the people who play those are the ones who come from Krasnodar and Rostov-na-Donu."

In Gambling Exile

Azov City has a way to go to compare with Moscow's Metelitsa.
Russian gamblers last year were shocked, shocked to find out that gambling would no longer be legal in most of the country. The ban put hundreds of thousands of casino workers out of work and threatened to drain as much as $1 billion in tax revenues from state coffers.

It also put an abrupt end to a culture of entertainment and excess embraced by the country's oligarchs and high-rollers. (There are signs that illegal gambling is flourishing, however: a large underground casino was closed down in Moscow earlier this year, and as many as 40 criminal cases connected to other operations are currently pending in Moscow alone.)

Prime Minister Vladimir Putin, who first proposed the step while president, said the ban was a moral imperative that would save families of modest means from losing their last kopecks. Instead, the Kremlin designated legal gambling zones in the Far East, Kaliningrad, Siberia's Altai Krai, and the Azov Sea coast. The plan, it was hoped, would funnel new income into economically sluggish regions while keeping the bulk of Russia vice-free.

Nearly a year into the experiment, however, foreign and Russian investors remain extremely skeptical. Azov City, near the mouth of the River Don in southern Russia, is the only zone to have successfully launched a casino. And Oracle, which is run by a Kazan-based investment group, Royal Time, has yet to capture the glamour of shuttered gambling legends like Moscow's Metelitsa or St. Petersburg's Taleon Club.

A long row of slot machines lines one of the casino's two rooms. The visitors -- mainly men, mainly dressed in black -- sit slapping buttons and feeding money into the machines. In the next room, more men dressed in black -- though they appear slightly more upscale -- gather for roulette, blackjack, and poker.

Dreams Of Prosperity

Royal Time says a second casino is expected to open by summer, and a third by year's end, with hotels and an aquapark to follow. The plans have sparked eager claims that the Azov City complex may eventually draw in as many as 25 million tourists a year.

For some visitors, it's hard to imagine a boomtown rising from what essentially remains an empty lot. But locals are cautiously optimistic. Lyudmila, a resident of the neighboring village of Molchanovka, says her home would still be without heat if it weren't for the Oracle and the infrastructure it demands.

"For us, of course it's good," Lyudmila says. "They gave us gas, electricity, water. We have gas heating now, so of course it's good for us. They'll find people who want to gamble. My sons don't go there. They've never been; they say they'll never go. They're scared because it sucks you in."

David Smelnikov -- Oracle's ideal client
Lyudmila has opened a small general goods store for casino employees and clientele. Other Molchanovka residents are looking forward to other amenities the casino may eventually deliver. There have been rumors that Royal Time may even finance the construction of a kindergarten.

Luring In The Customers

Perhaps the greatest challenge facing the Oracle is the amount of time it takes to get there. The two nearest cities, Rostov-na-Donu and Krasnodar, are hours away by car, and the conditions of roads leading to Azov City can be treacherous. (A Krasnodar lawmaker and his driver were killed in a late-night crash after visiting the Oracle for its opening-night gala.)

The casino has tried to sweeten the deal by offering free minibus service to and from nearby cities, but it hasn't been enough to draw in the crowds the casino is hoping for.

David Semelnikov, a 26-year-old fitter from Rostov-na-Donu, may be the image of the Oracle's ideal client -- a die-hard gambler who doesn't let a road trip stand in the way of his fix. He arrived at Azov City in his car at 11 a.m. for his fourth trip to the Oracle in a week.

Semelnikov says he has already made 5,000 rubles ($165) on the slot machines, and has winnowed the trip down to a relatively speedy 2 1/2 hours. He plans to spend four or five hours on the slots before heading back.

"They've banned it in the city, taken them all away and made a special entertainment center, where you can calmly, legally play," Semelnikov says. "It's the first legal club. So we've come from Rostov to try our luck."

Andrei, a local taxi driver who refuses to give his last name, is among those who has seen his fortunes improve as a result of the casino, enjoying a busy trade shuttling clients back and forth between the Oracle and various cities.

But after losing several thousand rubles on the slot machines -- and watching other people fall into despair after losing even more -- Andrei says he has personally lost his taste for gambling.

"They stuff 5,000, 10,000 [ruble bills] into the slot machines. That's the people with money. The poor people come and put in 1,000, 2,000, or 3,000, and end up with nothing. And these oligarchs who come with money, they just go on and on," Andrei says. "They come, have their fun, then get in their Jeep and go on their way."

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