Storm International, Russia's largest casino company, will open gambling venues in Costa Rica and Armenia this year and may abandon its home market because of restrictions, according to Chief Executive Officer Michael Boettcher.
Russian President Vladimir Putin is forcing casinos out of Moscow and St Petersburg to reduce gambling, exiling them to four regions outside the two biggest cities, Bloomberg News reported.
The industry's revenue has swelled to as much as US$7 billion a year in Russia, Boettcher said, after a 10th straight year of economic expansion.
"If the law doesn't change, we'll leave Russia," said Boettcher, a 60-year-old Briton who said he founded Moscow-based Storm 16 years ago with two blackjack tables and a roulette wheel. "Most staff, certainly the management, will come with us," he said last week at his Jazz Town casino in Moscow.
A law that takes effect in July 2009 permits gambling on Russia's Pacific coast, in the Baltic enclave of Kaliningrad, Siberia's Altai region and around the Azov Sea in the south. The areas are too far from Moscow to draw gamblers, Boettcher said.
Putin compared dependency on gaming to alcohol or nicotine addiction in 2006, the year the law was passed. Gambling mushroomed after the early 1990s, with casinos appearing in Russian cities and slot machines installed in Moscow's underground rail network.
Storm is aiming for 12 percent of the US$172-billion world gaming market by 2030, Boettcher said.
The company plans to open a renovated casino in the Armenian capital of Yerevan by May and will invest US$300 million developing a hotel, concert and exhibition halls, a shopping center and restaurants. In Costa Rica, the firm is refurbishing a hotel and building a casino, both scheduled to open by July.
Emerging markets are more attractive than developed nations because they have fewer rules governing gaming, the CEO said. Developing countries have drawn companies from Ladbrokes Plc, the United Kingdom owner of about 2,600 betting shops, to Queenco Leisure International Plc, which plans a Cambodian casino.
Storm's revenue has risen by as much as 25 percent annually in the past seven years and climbed 40 percent in 2007, Boettcher said, without giving specific figures.
February 23, 2008)