Moscow Casino Ban Forces
Storm to Open in Costa
Rica
By Maria Ermakova
(Bloomberg) - 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, Chief
Executive Officer
Michael Boettcher said.
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.
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
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 Soviet Union
collapsed in 1991, 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 $300 million
developing a hotel,
concert and exhibition
halls, a shopping center
and restaurants. In
Costa Rica, the company
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 U.K. 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 figures.
The company has five
Moscow casinos including
Jazz Town, which has its
own music club, 30
gaming tables and a
leather-furnished VIP
room.
``It's not just a matter
of openings,'' said
Boettcher, Storm's sole
owner. ``It's the GDP
growth. Salaries are
growing astronomically.
In 1992, it was all
bandits. People have
changed.''
Storm will turn its
Moscow properties into
stores, offices or
hotels and is
diversifying into
business jets and yacht-
chartering for
millionaires in the
Russian capital.
The casino owner, which
is also building a
resort in Sochi, the
host city of the 2014
Winter Olympics, has no
plans to borrow money,
sell a stake or go
public, the CEO said.
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