Gambling News by Gambling Headquarters

State Duma deputies unanimously gave tentative approval Wednesday to a bill that would tighten the screws on gamblers and ultimately ban gambling except in four special zones from 2009. But the legislation -- criticized for clumsy wording and prohibiting activities such as betting on friendly card games in private homes -- is widely expected to undergo drastic changes before it passes a second reading, probably later this year. "There is no doubt the bill will change beyond recognition," said Yevgeny Kovtun, a spokesman for the Gaming Business Association, whose members have been operating in Russia for the past decade. The bill, submitted by President Vladimir Putin last month, sailed through a first reading Wednesday by a vote of 440-0 and one abstention. Under the bill, small slot-machine halls and casinos will be closed next July, when a minimum gambling age of 18 and other restrictions come into effect. Duma deputies stressed the need for national gambling regulations, but said the legislation must clarify how the four gambling zones would be set up. The current version does not outline how many of the zones would be established inside residential areas. Also, it does not provide a mechanism for creating the zones, which is also key to the legislation's success, United Russia Deputy Igor Dines said. Federal authorities would grant five-year licenses for operation inside the zones.

The exact locations of the four zones have not been chosen, but Duma Speaker Boris Gryzlov has said two zones will be in European Russia, one in Siberia and one in the Far East.

The first zone will be created in July, Putin's representative to the Duma, Alexander Kosopkin, said during his presentation of the bill on Wednesday.

Moscow does not plan to apply for the status of a gambling zone, a Moscow deputy mayor, Iosif Ordzhonikidze said last month. This means that the 537 gaming establishments that are licensed to operate in Moscow would need to close or relocate to a special zone by 2009.

The national gambling industry, with revenues surpassing $5 billion per year, could shrink by at least 70 percent next summer, according to the Association for the Development of the Gaming Business.

Slot-machine halls smaller than 100 square meters and casinos smaller than 800 square meters would be outlawed beginning in July.

The bill does not address how businesses that took out loans or began expansion before the Kremlin drafted the legislation would recoup their investments, Kovtun said.

The bill, nevertheless, easily passed the first reading because gambling is a hot-button political issue.

"The reason we are discussing this bill is clear. It is elections," Liberal Democratic Party of Russia leader Vladimir Zhirinovsky said.

Duma elections are scheduled for December next year and the presidential vote is scheduled for 2008.

Communist Deputy Sergei Reshulsky said approving the current version of the bill was "the lesser of two evils." An imperfect law is better than no federal law at all, he said.

About 3 percent of Russians gamble at least once per month, according to a survey by the independent Levada Center in October. Most people who gamble are under 40, it said.

Gambling businesses are pushing to soften the bill's provisions and extend the gambling ban beyond 2009.

"What stance the presidential administration takes on this situation is important," said Duma Deputy Alexander Lebedev, an outspoken gambling critic.