The construction of Russia's fifth legal gambling zone will start in Crimea, Head of the Republic Sergey Aksyonov said. The site for the construction was chosen back in 2018.
It is the village of Katsiveli, 27 km from Yalta. By the first quarter of 2024, the Zolotoy Bereg gambling zone will be built on the premises of the unfinished Fortuna sanatorium.
Gambling has been banned in Russia since 2009, and an exception was only made for the four gambling zones in the country: Yantarnaya in the Kaliningrad region, Sibirskaya Moneta in the Altai territory, Krasnaya Polyana in the Krasnodar territory, and Primorye in the Primorsky territory.
A future gambling zone in Crimea might become a major competitor of Sochi's Krasnaya Polyana, which was launched in 2016. It occupies 33,000 sq. m of the former media center that was built for the 2014 Winter Olympics. Four billion rubles ($55.16 mln) were invested in the project. About 2 million people from 146 countries have already visited Krasnaya Polyana. The gaming zone regularly hosts poker tournaments, including world-class ones. Sixty million roubles ($827,400) became the record-breaking sum won by one person.
The Sibirskaya Moneta gambling zone, located 280 km from Barnaul in the Altai territory, hosted about 140,000 tourists in the challenging year of 2020. They brought in more than 85 mln rubles ($1.17 mln) in taxes from tour operators. Sibirskaya Moneta employs 350 people.
Russian President Vladimir Putin gave instructions to build a legal casino in Crimea back in 2014, but the local authorities could not decide on its location. In 2016, 16 hectares were allocated in Gaspra (Bolshaya Yalta) but then the land was transferred to a five-star hotel, and the gambling zone was moved to Katsiveli.
The future gambling zone will be located 27km from Yalta, between the villages of Katsiveli and Ponizovka. The five-star Mriya Resort & SPA known throughout Crimea and Russia is located very close to it. Surely its guests won’t miss the chance to visit Zolotoy Bereg.
The southern seaside village of Katsiveli was a place of work and recreation for famous physicists in Soviet times. Why did researchers choose to live in the village? This unique place on the Southern coast of Crimea is the sunniest in the area. The sun shines there for 200 days a year with a minimum rainfall of 430 mm per year. For instance, the annual rainfall in Sochi is 1700 mm.
The Fortuna sanatorium project for the Soviet nuclear workers was started in the 1970s. This building was supposed to become a health centre of the Ministry of Atomic Industry of the USSR Academy of Sciences. It was designed in the best traditions of Soviet architecture, fundamentally, grandiosely, and in a big way. After a few years, it turned out that the ground under the main building of the health resort was sliding. The construction slowed down but did not stop.
By the time of the USSR collapse, workers had assembled the frame of the main building, poured a concrete foundation for the embankment, made breakwaters and even built a tunnel for the tourists to get to the sea.
When the Soviet Union collapsed, the construction was stopped. The land was transferred to a private enterprise, and the sanatorium’s beach became frequented by nudists and hipsters.
Yalta Authorities’ Bright Hopes
The gambling zone will multiply the tax and social payments to the budgets of different levels providing an annual tax revenue of 90 million ($1.24 mln) to 250 million rubles ($3.45 mln), Yalta authorities said.
The gaming zone will primarily target wealthy tourists. According to the peninsula's authorities, it will be open all year round.
The project on the Golden Coast complex envisions the construction of various facilities such as casinos, banking facilities, hotels, restaurants, a summer theatre, a concert hall, a conference hall, a cinema, and outdoor areas.
There will also be sports facilities, a swimming pool and cycling, and promenade areas. Even a yacht club might be built in the area allocated to the gambling business.
“The project will bring economic and political benefits,” Chairman of the Crimean State Council Committee on Tourism, Resorts, and Sports Alexei Chernyak said. “The Crimean gambling zone compares very favorably in terms of location with the neighboring Krasnodar Territory. It is located almost by the sea. This is a good income for the region.
“Investments will total several billion rubles and create about 1,500 new jobs or even 2,000 if a yacht club is built. The gambling zone in the Krasnodar Territory pays 500 million rubles ($6.9 mln) in taxes from gambling business alone, and there is also personal income tax (winners give the state 13% of earnings), property tax, a license for alcohol in restaurants.
“The development of the area will give an impetus to the improvement of the settlement’s housing and utility sector and road repairs. Since the gambling business is for VIPs, there will also be helipads.”
How Experts Assess Crimea's Development Prospects
After the Republic of Crimea head announced that the construction of the Zolotoy Bereg gambling zone would begin in September this year, the project immediately became the subject of heated discussion and debates. Several experts who believe that “Zolotoy Bereg” will not meet customer expectations have called the project premature.
According to Dmitry Slobodkin, one of the founders of the gambling business in Russia, only two of the four gambling zones remain more or less profitable today, in Sochi and the Far East.
According to him, a casino can be built in two years or even faster, if you have enough money. Finding an investor might be a challenge.
“This business will be seasonal because the local population is not wealthy. Neither are the tourists who visit Crimea. A person has to be ready to spend his or her vacation money on gambling. Businessmen and officials are more likely to prefer a gambling zone in Sochi as well,” said Slobodkin.
The Crimean authorities who expect a year-round influx of tourists estimate that the project will generate almost 25 bln rubles ($344.75 mln) for the budget annually but Slobodkin doubts that.
He believes that the figures are significantly inflated. There is no tax on profits in the gambling business, only the table and the slot machine are taxed.
“There is a fixed rate on gambling equipment, so any great budget revenue is out of the question. For example, they will pay 250,000 rubles ($3,447.5) per table and 15,000 ($206.85) per slot machine. A casino can have ten tables and 30-40 machines. You might add a payroll tax and a real estate tax but the overall sum would be negligible for the budget,” said Slobodkin.
The project has also been negatively assessed in terms of design. Crimea-based architect Kirill Babeev criticized the project, saying that the feasibility of the building in this location raised reasonable doubts.
In Babeev's opinion, the iconic monuments of Crimea are Livadia Palace, Alupka Palace, Swallow's Nest, Mriya, and Crimean Breeze. The project proposed by the investor is not going to be a new calling card of the peninsula as it spoils the magnificent Crimean landscape.
“I believe that the construction of such impudent, unrestrained, and talentless facilities on the precious lands of the southern coast will harm the image of Crimea and its health resort industry not mentioning the environmental aspect of the issue. It is better to avoid the mistakes made in building the Primorsky Park and all sorts of Respect Halls and other “monsters” which are inappropriate in Crimea,” said Babeev. “It would be a big mistake to put up this strange facility of such form and size.”
“The construction of large infrastructure for a gambling zone will hit the most sensitive and scarcest resource of the Crimeans, i.e. the free seaside territory,” journalist Konstantin Kevorkian said.
In my opinion, a gambling zone on the peninsula is needed in places where it can become a locomotive of economic development, in the first place in northern Crimea or in the west, and maybe, on the eastern coast. Anyway, it should not be the south coast where the density of cultural and natural monuments is too high and where a gaming zone is unnecessary from the economic viewpoint.”
Public Reaction to Gambling Zone Construction in Katsiveli
Of course, such an important event in Crimea is a matter of public concern.
“Today, a gambling zone in Crimea is of no interest, especially for people abroad. If we talk about the incomes of Crimeans, this entertainment is not for our people and businessmen,” said Crimea Public Chamber chairman Alexander Formanchuk.
According to him, given all the problems the Crimean peninsula has today, including the COVID-19 pandemic the implementation of this project does not seem expedient.
“There will be no real demand for it now. The Crimea will not become a second Monaco,” Formanchuk said.
Local hoteliers are also skeptical. To their thinking, casinos are for the rich. Poorer tourists usually come to Katsiveli and rent rooms in guest houses for about 2,000 rubles ($27.58) a night. Even the management of the four-star hotel where suites are offered for 15,000 rubles ($206.85) does not expect a huge profit from Zolotoy Bereg.
“We are unlikely to make any money on it. All the gamblers will stay at the Mriya Hotel, which is just behind the future casino fence. Probably, better roads will be built in the village, and we will indirectly benefit from it,” the hotel administration said. “But what if the gambling zone attracts some criminals?”
Meanwhile, Kevorkian, as a local resident, is also worried about whether the destruction of protected areas will continue for the sake of the construction of the gambling zone. Unfortunately, cutting down forests, juniper groves, and cutting off access to the already diminished coastline is a sore subject for Crimean residents.
After all, the sea is a source of income for many Crimeans. Reduced access to the sea and fewer green areas and tourists mean less income for the local population. Therefore, the inhabitants of Katsiveli are not inspired either by the expected 500 million roubles ($6.9 mln) in tax revenue or by helicopter landing sites.
“It scares me. They are very likely to evict us. We won't be needed here next to the casino and will live somewhere in Bakhchisaray,” villagers say.
“They talk about jobs but the casino won’t hire us. They will bring in their people, and they will not even hire us as janitors,” they said bitterly.
“I am outraged! We are all shocked! When I read about the gambling zone in the newspaper I didn't sleep all night! Scientists lived in our village. There was an observatory, institutes...” one of the pensioners said emotionally. “Vladimir [the Great] was baptized in Chersonesus, and now there will be debauchery and blasphemy 60 kilometers away.”
The young generation is hoping for the best. “Well, it might be fun. A casino is better than half-built houses. Chances are at least some life will start in the settlement. There are no entertainments, not even a cafe!” young people said. Indeed, the settlement does not even have a public toilet.
Aksyonov Promised Monaco to Local Residents
In one of his interviews, Aksyonov said that he wants to follow the example of Monaco and prohibit residents from visiting the gambling zone. Citizens with low incomes will not be allowed to succumb to temptation and spend their whole salaries on gambling machines.
There is truth in his words. There were slot machines everywhere all over the country not long ago, and entire clubs were located in the basements of houses, where real tragedies happened. People were losing cars, flats, and fortunes. So, the Crimeans should not expect to win millions in the newly built casinos. Time will show whether Zolotoy Bereg which means “golden coast” in Russian, will be golden for Crimea. Anyway, the time for changes in the republic has already come.