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Russia exiles casino industry – and its seedy image – to Siberia

The move aims to counter Western depictions of the country as a fast and loose post-communist frontier. Gambling operators say the state is pushing the industry underground – and losing $1 billion in tax revenues.

By Correspondent / July 1, 2009

Passers-by are reflected in the closed doors of a casino in downtown Moscow, on Tuesday. The door plates read: 'Round-the-clock', top, 'Casino is closed', bottom. The government has ordered the closure of all casinos and gambling halls Wednesday, consigning gambling to four special zones in far-flung regions of Russia, some of them several thousands of miles and half-a-dozen time zones away from Moscow.

Alexander Zemlianichenko/AP

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MOSCOW – There were big empty spaces on some of Moscow's trendiest streets Wednesday, where the glitziest symbols of post-Soviet freedom – gambling halls – had done a roaring business until they were closed down by a strict new law, literally at the stroke of midnight.

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The law, promoted by former president and current Prime Minister Vladimir Putin and in the works since 2006, was aimed at shutting down a controversial business that a majority of Russians consider "immoral" and damaging to the country's image.

About 500 major gaming establishments have been forced to close their doors, including some truly palatial casinos in downtown Moscow that were frequented by many in the country's elite. Also shut down by police are countless hole-in-the-wall joints in grocery stores, train stations, and street kiosks that had featured a few slot machines or one-armed bandits and catered to just about anybody who passed by.

Gambling operators say up to 400,000 people have been tossed out of their jobs and the state has lost up to $1 billion in legal tax revenues, while the lucrative gambling industry will probably thrive anyway – but underground, in the hands of organized crime.

"A casino is a necessary service, like restaurants and theaters," says Vadim Bereslavksy, who managed the Hotel Cosmos casino in Moscow for the past 15 years, and was responsible for around 800 employees. "Many of the people who worked with me will have a hard time now; we'll try to find them jobs in the industry outside of the country."

Fast and loose post-communist frontier?
But many conservatives have chafed for years at Western depictions of Russia as a fast and loose post-communist frontier, run by mafia thugs and anything-goes capitalists.

For many of them, the huge neon-lit casinos that have dominated Moscow's post-Soviet downtown nightscape were a symbol of national decay.

"Practice has shown that this business is socially destructive," says Yevgeny Fyodorov, chair of the State Duma's committee on economic policy. He says it caused large numbers of people, including vulnerable groups like pensioners, to become "addicts" and led to serious damage to families and communities.

"Gambling is neither acceptable for the authorities, nor for society. Here we have absolute support," he says.

A survey released this week by the independent Profi Online Research agency found that 72 percent of Russians support the law, while 19 percent oppose it.

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