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Gambling Gets A Run For Its Money In Azerbaijan

Officials hope that state-run sports gambling will bring millions circulating in the black market into state coffers.
Officials hope that state-run sports gambling will bring millions circulating in the black market into state coffers.
BAKU -- Azerbaijan recently loosened its 13-year ban on gambling in a move that has the state hedging its bets against an unlucky number.

State-sanctioned sports-gaming tables began operating on January 18, part of a government effort to increase revenue for its sports programs by levying a 6 percent tax on the newly legalized industry. The change allows sports-betting tables and lotteries to operate, but casinos remain banned.

The ban on gambling dates back to a 1998 scandal involving the current president of Azerbaijan, Ilham Aliyev. Media reports claimed that he lost up to $6 million to a Turkish businessman while gambling in a nearby country.

Aliyev's father Heydar, then president of the oil-rich country, denied the charges and promptly banned casinos and gambling activity in a morality drive.

Response to the new betting opportunities has been mixed. Some Azerbaijanis say state-run pools won't be able to compete against the lotteries offered in the country's thriving black market industry. Others praise the initiative as a cost-effective way to shore up government revenue.

Neighbors' Influence

Bookmaker Shahin Qafarov says the state-run betting pools are similar to those in place in Turkey, where all official gambling is state-run -- an arrangement that has given rise to an enormous amount of foreign-based Internet gambling sites targeting Turkish gamers.

Azerbaijani officials, anticipating a similar situation, have said that the government will start blocking access to betting sites in the coming months.

But Qafarov, who works at one of the state-owned Topaz lotteries, thinks the government is better off focusing on the market.

"Those behind the new betting places should make them more competitive than the black market. They should increase the people's interest," Qafarov says. "But it's vice-versa here. They use the Turkish system, where the coefficients are very low and not exciting for people. Such programs exist only in Turkey."

Azerbaijan's neighbors, including Turkey, may have played a role in the country's decision to legalize gambling. Armenia on January 12 issued licenses to dozens of gaming organizations, bringing in some $2.7 million in taxes to date.

Over in Georgia, the country announced its first-ever million-dollar jackpot on December 24, 2010. The winner was an internally displaced woman, Zamira Tordinava, living in a refugee camp in the capital -- a city that boasts at least 340 slot-machine clubs for a population of just over 1 million.

Gambling may be prohibited in much of neighboring Russia, but President Dmitry Medvedev's recent push to close casinos operating illegally in Moscow suggests a flourishing underground industry. A new bill introduced in parliament, meanwhile, would introduce heavy fines for those caught gambling online.

Shining Light On Black Market

Legal or not, the gambling industry also raises concerns of violence. An Azerbaijani court in April sentenced a man to 14 years in prison after he was convicted of shooting a man over a gambling debt.

Mahir Rustamli, the editor of "Futbol+" magazine, thinks a legal gambling industry will help deter violence. He says the lack of limits "caused family tragedies. Now all this will be regulated by law. Betting will be limited, risks lowered." He also notes that millions now in the black market will go to the state.

It is hard to say who's behind the illegal gambling circuit in Azerbaijan, but Ruslan Mammadli, the editor in chief of the sports supplement "Bookmaker," which publishes statistics from foreign betting pools, says those running it must be "very powerful men, because when the police come to search them, the bookmakers give the patrons' names" in a bid to avoid prosecution.

Officials say legalized gambling will boost the economy. "People gather in these sports cafes, and the cafes do a good business. Both the government and our sports teams benefit, and taxes go to the budget," says Azer Maharramov, the director of Azersportservice, one of the companies selected by the state to run their new lottery system.

But for Parviz, a 21-year-old gaming enthusiast who declines to give his last name, no matter where you place a bet -- the black market or the state-run tables -- you have to play it smart.

This young man, who has been betting on teams for the last three years out of Baku, offers some betting advice for Azerbaijanis who may want to give gambling a try now that it's legal.

"Most people call it gambling, but I would call it a game of fate. It doesn't matter how much you like a team," Parviz says. "You shouldn't think about how much you like a team when you place a bet. You have to be logical."

Ilham Aliyev, meanwhile, is taking the logical bet that no matter how Azerbaijan's citizens wager -- in gambling, the house always wins.

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