Russia's good intent to create gambling zones leads to huge job losses

The Russian government shut down all gaming halls today, leaving a third of a million people jobless. It will replace the casinos and gambling halls with Las Vegas-style gaming zones in four rarely visited regions which are reportedly in need of investment, including one near the North Korea border.

The development zones - in the southern Krasnodar region, the Baltic enclave of Kaliningrad, east Siberia's Altai region and the Far Eastern port of Primorye require investment of $US23 billion and have not been built. Kaliningrad, wedged between Poland and Lithuania and annexed from Germany after World War Two, is to have 10 casinos - the most in any of the zones.

However, critics of the government plan, which will cover Russia's 11 time zones, say it is doomed by a lack of investment.

Unemployment in Russia is already at an eight-year high and industry bodies estimate 300-350,000 jobs are at risk. Deputy Moscow mayor Sergei Baidakov says only 11,500 workers will become unemployed across the country, half of them in the capital. Those laid-off will find work in the restaurants and shops that will fill the spaces left by the gambling establishments, he said.

"The damage to the health of people and society would be a far greater figure than the money lost in the budget (from gaming taxes)," Baidakov told Reuters. Russia's gaming industry brings in up to $US7 billion a year and pays $US1 billion in taxes.

Solomon Ginzburg, a deputy in the regional Duma, said casinos will operate underground after the ban, as in the Soviet era when almost all gambling was illegal but took place in homes or cellars. Besides, seventy percent of the Kaliningrad population is against it.

In addition, Moscow city police say they will raid any gaming halls in the early days of the ban.