Lenar Kashapov Interview, Gaming & Leisure Magazine, Spring 2013


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Interview with Lenar Kashapov, Director of Azov-City Gambling & Resort, Krasnodar region, Russian Federation.

Published in Gaming & Leisure Magazine, Spring 2013

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Lenar Kashapov Interview, Gaming & Leisure Magazine, Spring 2013

  1. 1. Spring13_G&L.qxd 3/10/13 2:16 PM Page 50 INTERNATIONAL GAMING Bill Healey AZOV-CITY, KRASNODAR REGION, RUSSIAN GAMING ZONE In the Fall 2012 G&L issue, information and negotiate with the authori- we reviewed the general ties of the regions that have gambling zones – state of affairs for the overall Kaliningrad territory, Altay and Primorski casino gaming industry in regions. I think there are no people in Russia the Russian Federation. who have more information and contacts in With this issue, we’re tak- gambling zones beyond our group. ing a closer look at one of the four special gambling G&L: Located in Krasnodar Territory in zones created by Russian Federal Law No 244. Russia’s Southern Federal District, how is Mr. Lenar Kashapov, Director of Azov-City Azov-City positioned for in-bound tourism? Gambling & Resort joins us for this discussion. Lenar Kashapov l Director of Azov-City Gambling & Resort Lenar Kashapov: To have a strong position for G&L: The non-profit “Association of the in-bound tourism we have to continue to Gambling Zone of Azov-City” was created in To meet the first target we negotiated with expand our facilities. We have only two casinos 2009. What are the objectives of the the government about infrastructure expan- at gambling zone Azov-City at present. They Association? sion: constructing roads, power lines and are not very attractive for international tourists. treatment facilities. To meet the target for People from Vladivostok, Tyumen, Ulan-Ude, Lenar Kashapov: According to Russian leg- industry standardization we developed build- Stavropol, Novocherkassk, Moscow, and St. islation gambling organizers are required to ing norms and standards for casino buildings. Petersburg visit our casinos. In whole about 80 create a noncommercial organization repre- At the time we didn’t have such norms for cities in Russia and abroad visit our casinos. senting their interests. Federal Law No 244 gambling facilities, so we discussed legislative The largest group of visitors comes from neigh- contains this provision and further stipulates and regulatory acts with the parliamentarians boring Rostov-on-Don and Krasnodar. such organizations could also have part of and requested changes in legislation. On managing functions at the gambling zones. behalf of the members of the association we We recognize that the Azov-City gambling There is an annual investment forum in Sochi negotiated with the largest consulting firms zone is situated in a distinctive region of (Krasnodar region) where the cooperation and also potential partners about investments Russia, so we have no doubt it will be inter- agreement between Azov-City Gambling & and operating casino resorts in future. esting for foreign tourists. You could not see Resort and the Administration of Krasnodar such nature and bright expressions of Russian region (regional governmental body) was Russia is a unique country and the experience, culture in other Russian gambling zones. signed in 2009. contacts and knowledge we have are an Kuban (another name of Krasnodar region) is invaluable treasure for the development of the native land of the famous Cossacks. The main functions of our association are: Russian gambling industry. Moreover, in the • Lobbyism future we are planning to work for develop- Situated on the Black Sea, the coastal city of • Industry standardization ment and promotion of all four gambling Sochi will host the Winter Olympic Games in • Attracting investments zones in Russia, so we permanently collect the 2014. It boasts an innumerable quantity of From the point of view of expected profit, Azov-City is a fascinating project. Azov-City is the first gambling zone in Russia and it seems that it will evolve into the first Russian casino-resort destination with a critical volume of tourists and gamblers. 50 GAMING & LEISURE SPRING 2013 702.547.4545
  2. 2. Spring13_G&L.qxd 3/10/13 2:16 PM Page 51 AZOV-CITY, KRASNODAR REGION, RUSSIAN GAMING ZONE Courtesy of iStock ancient historical destinations interspersed G&L: As with Las Vegas, Azov-City has been From the point of view of expected profit, with fields of sunflowers and wheat. All these created in a lightly populated area far from Azov-City is a fascinating project. Azov-City is features will be used to breathe the spirit of cities of any significant size. Are there paral- the first gambling zone in Russia and it seems Russia and the region into the non-gaming lels between the two gaming regions? that it will evolve into the first Russian casino- facilities in Azov-City. We already have visi- resort destination with a critical volume of tors from China, Turkey, USA, Ukraine, Lenar Kashapov: Of course, everybody is tourists and gamblers. From the point of view Europe and are sure that soon we will see trying to find these parallels. But what are of business organization; independent foreign tourists from Israel and Arabian countries. they? I cannot answer. There were many other investors with western technologies and men- factors that helped to develop Las Vegas. tality will not be able to develop projects here When the authorities of Krasnodar region repre- on a stand-alone basis, it will be necessary to sented the Azov-City gambling zone investment I think Russian casinos will have their own have a local partner. Authorities wish to avoid project in 2009 they declared that the airport, identity because Russian gamblers have their the risk that foreign investment would over- seaport, and a high-speed highway would be con- own distinct mentality and behavior. whelm the domestic Russian investment. structed. They also planned to construct resort Gambling in Russia has its own history, but facilities for elite leisure: hotel complexes, yacht- it is not very long. For example, Americans The gambling industry in Las Vegas was ini- clubs, aqua-parks, marines, golf clubs, horse-rac- visit Las Vegas for rest, entertainment and tiated by gangsters, but according to Russian ing, and other lifestyle facilities for the up-scale fun, for Russians, a trip to casino is a chance gambling legislation people with criminal leisure and entertainment market. The regional to win. The Russian gaming market was records cannot be engaged in business. Las administration estimated a stream of visitors up aimed mainly at local guests even when it Vegas was built up chaotically, but Azov-City to 6 million persons per year from the countries was at its peak, only a few people here under- has committed to a regional development located within a two hour flight. stand it as a tourist activity. plan through legislation; land use and devel- S O U R C I N G V E N D O R S ? U S E T H E G H R C ! W W W. G A M I N G A N D L E I S U R E M A G A Z I N E . C O M 51
  3. 3. Spring13_G&L.qxd 3/10/13 2:16 PM Page 52 INTERNATIONAL GAMING opment rules. The highway in Las Vegas was various standard and legal acts. Moreover it is the fight against illegal gambling is under built without much ado, but authorities in necessary to find infrastructural capacities, personal control of the Governor. Krasnodar region are trying to manage with develop and coordinate the general plan of local roads. And at last the gambling industry land using at the new location. And at last it According to official data the Office of the gives us a head start; there are a lot of profes- is necessary to find a lot of money which the Public Prosecutor closed more than 40,000 sional investment companies and gaming regional authorities do not presently have. illegal gambling facilities and more than 450 operators all over the world, so we continue to This project is developing slowly and it has to illegal casinos all over the Russian Federation. look to them for their experience. be changed due to bureaucratic procedures. But you should consider that law enforcement Construction processes at the new site could bodies often close the same gambling facility As to location, I cannot say definitely, we are bring more difficulties. many times. There are also some facilities that similar to Las Vegas or not. The first part of are difficult to enter since they are under gambling zone Azov-City is situated at the We support regional authorities in this initia- somebody’s protection. Coast of Azov Sea where the surrounding ter- tive; moreover we have ordered and developed ritory is quite large, and there are many peo- the land use concept of the Golden Sands. We But on the other hand the gambling zone is ple who wish to live and work here. are watching the developments and as soon as visited mainly by VIP gamblers who don’t a clear light is shed upon the situation, we like to be arrested. If you visit an illegal casi- G&L: Oracul Casino was the first to open in will immediately publicize the progress along no in Russia such arrest and prosecution is Azov-City. Is there planned expansion of the with government authorities. very possible. The elite will go to legal casi- Oracul Casino? nos to enjoy better service and entertainment G&L: Some people have considered illegal programs, complete with an opportunity to Lenar Kashapov: Royal Time Group is the gambling facilities in the cities as the main win the prizes guaranteed by the govern- owner of Oracul, the first Russian casino. competitors of the gambling zones. How well ment. I am absolutely sure while illegal Oracul was created with the declared intent of are the authorities controlling these illegal gambling is prospering, the development of significantly boosting this new resort-city in gambling facilities? Russian gambling zones will be extremely the south of Russia, where gambling is slow. planned to be only a smart part of the regions Lenar Kashapov: That is a shadow business entertainment offerings. and I cannot answer objectively “How well are G&L would like to thank Mr. Lenar the authorities controlling illegal gambling Kashapov for his time in discussing the sta- The first 1500 square-meter gambling facili- facilities?” I’m studying gambling in Russia, tus and future of Russia’s Azov-City ty was opened in 2010, and has since expand- but even my knowledge is not enough to esti- Gambling & Resort. ed to 4000 square-meters. The Casino Oracul mate volumes of illegal market. is presently building a hotel complex which Based in Bali, Bill has been consulting, will be the biggest part of resort. I think the Struggling against illegal gambling is differ- installing and supporting solutions in the glob- construction will take about 15 more months. ent in different regions of Russia. In some al golf and leisure industry since 1982. He has Investors and partners trust Royal Time regions government and law enforcement been involved with over 1000 systems installa- Group, so I suggest financing would not be a bodies are focused on other important issues, tions in 40+ countries from North America to problem. and therefore the struggling against illegal Africa to Asia & Australia. gambling is not prioritized. In other regions, The most difficult thing in Russia is main- taining a dialogue with authorities. Gambling is a new industry in our country and we recognize it is very important to have a correct economic calculation. To plan its strategy, Royal Time constantly consults with authorities. G&L: A mixed-use tourism project “Golden Sands” is being billed as the Leisure Capital of Russia. What is the status of development, and what offerings are intended within this project? Lenar Kashapov: The coordination of such an initiative in Russia is very long process. It is necessary for authorities to make changes to 52 GAMING & LEISURE SPRING 2013 702.547.4545