South Korean Casino Group Looks to Enter Russian Market

Flags of Russia and South Korea

A major South Korean casino operator, K International, has been considering opening a casino in Russia. This would be a significant move, and people are curious as to how the Russian authorities and people would react.

History of gambling in Russia

Gambling is legal in only four areas of Russia: Primorsky, Kaliningrad, Krasnodar, and Altai.

Over the years, the gambling sector in the country has been kept under close control by the authorities. A 1927 law led to a wide-scale banning of gambling activities throughout the country. While lotteries were not included in this ban at first, they were added a couple of years later.

Slot machines started to pop up around the nation in 1988, mainly in hotels that were members of the State Committee of Foreign Tourism in the USSR. Only state structures, not private businesses, were allowed to install these slot machines.

The ban on gambling in Russia was removed in August 1989, and the very first gambling establishment was launched in Moscow. After the Soviet Union collapsed, poker began to take off in popularity, as people started to engage more and more with Western culture.

Since the turn of the century, gambling has become a serious concern for the authorities. As the number of casinos, gambling houses, and slot machines rapidly grew, problem gambling began to be a concern. For example, in 2002, there were about 70,000 slot machines, 2,000 gaming areas, and 58 casinos in Moscow.

Widespread advertising campaigns led to younger people developing gambling-related problems, and many regularly skipped school to play slots instead.

There was also the concern that gambling was being used by criminals to launder money. Many possible solutions were proposed for these problems until July 2009, when the ruling was made that gambling was only to be allowed in four regions of the country. After this ban, illegal gambling operations rose dramatically and are still popular today.

While it appears that the authorities in Russia are anti-gambling, they do support the four regions where gambling is allowed. They are interested in further developing the offerings in these regions and hope to one day compete with the likes of Macau and Las Vegas for being an international destination for gambling.

South Korean interest

A South Korean casino company called K International has been exploring the possibility of entering the Russian market. The company would invest more than $263m (£204m) in a casino, hotel, shopping mall and a zone for duty-free goods. The project would be located in the Primory Integrated Entertainment Resort Zone in the Primorsky region. K International would work with the Primorsky Krai Development Corporation.

This region is already home to other noteworthy casinos. A couple of projects are in the development phase and the Tigre de Cristal resort recently opened after an investment of $144m (£112m).

There are still 118 acres open for development in this gambling zone. The proposed K International project would require 49 of those acres.

This integrated resort, if started soon, would be finished by 2022. The proposed project would need to receive approval from the regional vice governor. Once approved, K International would be able to partake in the bidding process to win the right to use the land.

The region is still mostly underdeveloped and there is a lot of upward potential. It is located in the far east area of Russia, so it is close to the Asian market. Many people in that market are looking for new gambling destinations.

K International plans to submit finalized designs in the coming months, most likely in November.

Because this project represents a significant investment, there is a good chance that the authorities will ultimately approve it.

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