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 Industries / Entertainment  

              since 1992 on present time
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Industry Description

Gambling business has already existed several hundreds years as an integral part of the entertaining industry. Its history is very long and bright.

It is not worth proving that the former Soviet people have a special inclination toward gambling. Much more than one song dedicated to gambling has been sung in Russia. Life is compared with roulette, the same roulette is urged not to treat people unfairly and assumed to be impossible to escape from. It is not for nothing that the Russian poet Andrey Voznesenskiy published an anthology named "Russia is a casino" and Russia is compared with a huge spinning roulette with its blind fortune and wild rhythm.

In the Soviet era gambling was officially prohibited. The Criminal Charter in force contained the following clauses: "Keeping dens and procuring" (Clause 226), "Organizing gambling" (Clause 208.1) and others.

It does not mean, however, that people did not play for stakes then. So called "gambling dens" (illegal gatherings of professional gamblers) existed. They had nothing in common with casinos, the main characteristic of which is that they play against gamblers.

History of legalizing gambling business in Russia began in 1989 when the first casino was opened in Moscow (in the Savoi Hotel). The second casino ("Moscow") started operating in 1990 in the Leningradskaya Hotel. Royal Casino was opened in 1991 in the former Moscow Hippodrome Building and was the third. People began coming to casinos to entertain themselves and have a rest.

On the grounds of Clause 33 of the Law of the Soviet Union "On taxes levied on enterprises' activities" and the Resolution issued by the Supreme Soviet on June 14, 1990, which provides for procedure of putting this law in force, tax on income of casinos amounted to 70% of their taxable income.

Future perspectives of gambling business were great because since Perestroika good manners have been associated with attending casinos.

In June 1991 Soviet of Ministers of Russia issued Order # 680-p, in compliance with which activity connected with opening a casino on the territory of Russia could be implemented only on the basis of a special license issued by the Ministry of Finance of Russia.

Every year has been bringing about new difficulties in existence of casinos, because official bodies regarded gambling enterprises as very promising taxpayers. In 1994 Moscow government issued the Order "On measures on regulating observation of legislature in the field of gambling business in Moscow". The extract from this Order runs as follows: "Lack of legislature regulating gambling business, especially activity of casinos, hinders exercising control by official bodies, leads to unfounded growth of the number of casinos in Moscow, promotes development of criminal situation and underpaying taxes on basic activities of casinos, which go to the city's budget." With the purpose of solving this question special commission for regulating and observing legislature in the field of gambling business was incorporated under the auspices of the Moscow Government. It was formed to prepare and submit to the Moscow Government the following documents:

  1.Proposals on lease rates for premises occupied by gambling enterprises;
  2.Proposals on certification of special equipment and attributes used in gambling business.
  3.Draft of the Law of Moscow "On activity of casinos in Moscow".
  4.Concept of gambling business development in Moscow.

Moscow State Tax Inspection and Department of Finance were assigned to consider situation in the field of taxation of gambling enterprises and prepare proposals on improvement of the present tax system.

State Licensing House stopped issuing licenses to gambling enterprises till 01.01.95.

The idea of moving casinos outside Moscow and creating small Las Vegas outside the city was born after that. Later several Moscow casinos tried to put it into being by participating in "Nagatinskaya Poima" project, which turned to be a great failure.

In the result the Order "On licensing activity on keeping gambling enterprises" dated 10.03.95 was issued. The extract from this Order runs as follows: "Beginning from 15.03.95 activity of gambling enterprises on the territory of Moscow region should be implemented only on the grounds of license issued by the State Regional Licensing Department".

After that State Tax Department of Russian Federation issued the Instruction "On procedure of calculating and paying tax of income of legal entities". According to this Instruction earnings of casinos, other gambling enterprises and business are taxed on the basis of the rate of 90% and the tax is paid to budgets of subjects of Russian Federation.

The Order of the Mayor of Moscow "On allowing activity of Cultural and Entertaining Centers on the territory of Moscow" was issued on October 1, 1996. According to this normative document activity of casinos was allowed on the territory of Moscow in the framework of Cultural and Entertaining Centers.

Russian gambling business has been developed rapidly. By the end of 1996 70 casinos were licensed in Moscow. The number of casinos in Las Vegas were twice higher but they were constructed earlier than the city itself.

But the Order dated October 14, 1997 "On permitting activity of casinos incorporated in Cultural and Entertaining Centres operating on the territory of Moscow" introduced stricter rules of licensing activity of casinos and announced the following additional requirements:

   Russian and foreign investors must invest into a Cultural and Entertaining Centre not less than 15 bln rubles.
   Casino must have not less than 30 gambling tables.
   It must be equipped with not less than 10 gambling slot machines.
   It must employ not less than 150 people

Several months had passed before casinos got used to new practices. The number of casinos in Moscow fell down considerably (40 casinos against 70), because new practices of strict regulation complicated activity of existing casinos and procedure of opening new gambling enterprises.

The current concept of construction of the "Centre of Entertainment and Leisure" in Nagatinskaya Poima is being actively discussed. It has been worked out on the basis of the Order of the Moscow Mayor issued on July 19, 1996 "On additional measures regulating procedures of opening gambling enterprises, their work, determining their maximum quantity and location". According to this Resolution an Amusement Park should be constructed on the territory of Nagatinskaya Poima. It should consist of the following parts: zone of amusements, sport zone, customer service departments and zone of Cultural and Entertaining Centres. Name of the article from the Newspaper "Capital" can serve as the motto of this project the best. It runs as follows: "The Mayor of Moscow eliminated competitors of selected casinos". If this decision was brought into realty only 2-3 casinos would be able to survive in Moscow.

Transfer of gambling centres to Nagatinskaya Poima may not suit several foreign investors because it can lead to foreign capital leaving Russia for other countries. But even this possibility cannot stop the Mayor of Moscow willing to reduce the number of casinos in the city. Implementation of this project was disrupted by the 1998 year crisis in Russia, but the Mayor made it clear that he is going to return to this idea when the situation will turn for the better.

In 1997 tax bodies began active discussion of new taxation principles (that is introduction of fixed tax rates per one unit of gambling equipment). As the 90% tax rate does not suit businessmen, tax earnings of the state bodies do not comply with the anticipated result. Thus reduction of the number of casinos to five enterprises planned by the Mayor will be implemented, because many gambling centres would not afford paying such sums. The Law "On tax on gambling business" was adopted by the State Duma on July 16, 1998 and by the Assembly of the Federation on July 17, 1998. It stipulates tax on gambling business, the rates of which is set in minimum wages. Currently minimum amount of tax payable per year constitutes:

   - per each gambling table for games in which a casino participates as a party - 1200 minimum allowed wages;
   - per each gambling table for games in which a casino participates as an arranger (observer) - 100 minimum allowed wages;
   - per each gambling slot machine - 45 minimum allowed wages.

Those are only taxes paid to federal officials, meanwhile tax on gambling business paid to the city's budget is under consideration now. It will amount to:

   - per each gambling table for games in which a casino participates as a party - 2800 minimum allowed wages;
   - per each gambling table for games in which a casino participates as an arranger (observer) - 200 minimum allowed wages;

However in spite of such unfavourable economic situation, Moscow casinos continue to work and this fact is worth being happy about. In any economic situation gambling enterprises regularly pay taxes and provide 50,000 working places for young people employed in gambling business and 100,000 places for people servicing this type of commercial activity in Moscow alone.

Gambling houses are not similar to each other and naturally they work in a highly competitive environment. Every casino has its own style, atmosphere and rules. And in these circumstances it is up to the casino to become attractive for gamblers. The main task of the casino is to create comfortable atmosphere for clients. It can be done not only through extending services of a free-of charge bar, taxi and banquet. People come to casino to have a rest. It is simultaneously a relaxation and deep emotion. Friendly staff and cosy atmosphere also play an important role. It is to the benefit of the casino if its style and services comply with the highest standards.

Royal Casino is one of the oldest and most elegant casinos of the city and it deserves this appraisal. Casino is located in a very beautiful building, one of the most valuable architectural masterpieces of Moscow - Moscow Hippodrome Building.

Interior of the Royal Casino matches the classical film image: ancient luxurious surroundings, rich people playing games. When the building was under repairing designers restored classical style of interior and equipped the casino with luxurious furniture and decorations. The casino has traditional gambling equipment for playing American Roulette, Black Jack, Big Poker, Stead Poker and gambling slot machines. Royal Casino has a quality certificate for customer service.

Obviously different people attend casinos. Each Casinos have its own style, atmosphere and rules. For example such casinos as "Golden Pales" and Crystal earn profits by servicing as many visitors as possible and it does not matter which part of the society these people represent. Meanwhile the last point is the most important for the Royal Casino. Rich, intelligent people visit it, whose aim is not to earn money, but to have a good time and enjoy themselves playing games. For instance average customer of the Royal casino is ready to spend there $600, clients of other casinos can afford only $300. It is as natural as that some people go to ordinary shops and others only to expensive, exclusive shops, which sell only high-quality and expensive products.

Every day situation with casinos in Moscow can change and not for the better. But in spite of that, casinos continue to operate entertaining their visitors and earning money for federal bodies and the city's officials

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