Special Gambling Zones an Uncertain Bet

Restricting casinos to two Las Vegas-style centres may boost tourism in those areas, but it could also encourage to illegal gambling elsewhere in Kazakstan, NBCentralAsia observers say.



From April this year, gambling in Kazakstan will be confined to Kapshagai near Almaty in the south, and Shchuchinsk near the capital Astana in the north. The Kazak authorities adopted a law in December requiring all casinos and gaming halls to shift to the two designated zones ahead of the deadline.



A resort complete with an international airport, hotels, casinos and other leisure facilities will be built on the shores of the Kapshagai reservoir. Local media report that the Hong Kong-based Shun Tak Holdings will be one of the main investors in the 10 billion US dollar project, which has been approved by President Nursultan Nazarbaev.



Anton Morozov, head of the Kazakstan Institute for Strategic Studies, which is affiliated with the president’s administration, says the country can easily afford projects on this scale. He cited the example of shifting the capital from Almaty to Astana in 1997, which required the city’s entire infrastructure to be built almost from scratch.



Morozov said the town of Kapshagai will benefit from having its infrastructure modernised, which will help solve social problems, while the development of tourism will boost the local economy.



“The plan is that Schuchinsk and Kapshagai will not simply be gambling centres, but that they will attract tourists from the entire Eurasian region,” he said.



Mihail Yegorin, head of the information and analysis department at the Business Resource Central Asia centre, is not so optimistic, saying the revenue from foreign tourists will be insignificant.



“It is quite expensive for Europeans to travel to Kazakstan, and they would only do so if they were going to see something really unique,” he said. “I don’t think the Kapshagai entertainment strip will attract them, especially since they’ve got Monte Carlo and other resorts nearby.”



Yegorin said that investors who are seriously considering putting cash into this project are by no means naïve and will only get involved if they are offered significant perks like tax breaks.



But the resort is not only for foreigners; it will also appeal to middle- and upper-class Kazakstan residents, who Morozov thinks are ready to enjoy a flutter.



“No distance is too great for those who like gambling in casinos,” he said.



However, Altynay Bayanova, vice-president of the Kazak gambling association, warns that gambling will simply go underground in other parts of the country once legal casinos have been confined to the two special zones.



“No sensible person will go all that way to gamble in a casino,” she said.



“The government is effectively creating a situation where the business will go into the shadows. That’s what happened in Turkey and Mexico, where they don’t pay taxes to the state, but pay off the police instead. The same will happen here,” she said.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)