An investor in the Azov-City gaming zone has announced its intention to invest in the Crimean gambling zone on one condition – for the authorities to provide guarantees it won’t be unexpectedly closed like his previous business.
Earlier this week, Maxim Smolentsev, the owner of the Shambala company, which runs two casinos in the zone, said that his company is interested in opening a casino in Crimea.
Meanwhile, Shambala deputy management director in a report from business daily Kommersant noted that the Crimean authorities had not yet provided any information about the project.
The Azov City gambling zone, of which Shambala is an investor, along with the Royal Time Group, will cease to exist on January 1, 2019, following the government’s order as it cannot co-exist with the Sochi gaming zone.
Smolentsev complained that all his company’s attempts to approach other gambling-related projects in Russia were unsuccessful.
“I wrote a letter asking to rent facilities [in Sochi], but received no reply. The same situation happened with the gambling zone in Anapa [initially a substitute for Azov-City before being replaced by Sochi]. We were not even allowed to participate in the auction,” Smolentsev added.
According to David Baghiyan, Shambala’s deputy marketing director, the investment guidelines and guarantees of the state are of key importance for the company.
“We are ready to participate in many projects, but the main thing is to know the exact conditions – they must be clear and transparent. In Crimea it is still unclear what the site looks like, what is the situation with communications, infrastructure and so on. Investments in the opening of Azov-City amounted to RUB 10 billion (US$176.9 million), if we don’t count the state money. It is difficult to understand how much one has to invest in the gambling zone in Crimea. If there are roads, power capacity, gas, this can significantly reduce costs,” Baghiyan said.
He also added that his company needs guarantees from the state that it won’t be closed in the future, pointing at the fact that its two casinos paid RUB200 million in taxes in 2016.
Meanwhile, during the six years when Shambala operated in Azov City, it invested a total of RUB 2 billion in it, but, according to the local law, it is unlikely to receive any compensation.