Sochi’s economy could get a boost if casinos are allowed as a way for the city to recoup the investment made in new infrastructure for the 2014 Winter Olympics, an analyst says.
Last week, RIA Novosti news agency reported that Russian President Vladimir Putin asked Sochi authorities to study the feasibility of establishing a gambling zone there.
“Sochi makes a lot more sense than Crimea,” said Jonathan Galaviz, partner at Global Market Advisors LLC.
Russia currently has one gambling zone in operation – on the border between Krasnodar Territory and Rostov region – and three more are being built in Kaliningrad, Altai and Primorsky regions. In April, Mr Putin submitted a draft law to the Russian parliament to establish a gambling zone in Crimea, after Kremlin declared the Ukrainian territory part of Russia.
Mr Putin said it would be up to the new authorities in Crimea to decide the location and extent of the planned casino zone.
“Crimea has significant political instability, but Sochi provides a solid platform of tourism potential,” Mr Galaviz told GGRAsia.
Mr Galaviz has previously worked with Russian authorities on casino gaming policies. In 2012, Mr Galaviz advised Russia’s state-owned Nash Dom Primorye, which is promoting a gambling and entertainment zone near the port city of Vladivostok.
Sochi spent about US$50 billion in infrastructure for the February Winter Olympics and investors are worried about recouping the investment. Casinos could be a way to attract more tourists to the city and take advantage of the existent infrastructure.
“The infrastructure built in Sochi due to the recent Winter Olympics held there is significant and would support tourism growth,” said Mr Galaviz. But he warned: “It would be important for Sochi to approach the casino gaming issue in the same way Vladivostok did – with transparency and structure.”
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors