Michael Pascoe writes:

Macau, Moscow
– heck they sound a bit the same, let’s get into the casino business in both of
them. Maybe that’s the reasoning behind PBL’s latest reported venture.

Another maybe is that there was so much
red ink to go round for PBL in 2001 on all manner of fanciful
investments that James Packer has overlooked the amount written off on
the company’s Indian foray.
That was TV-related rather than casinos, but there were still lessons
about
strange foreign countries, potentially troubled partners and
governments that
are not beholden to your Australian media power.

Five years on and PBL is punting
heavily on two towns that are definitely foreign with partners that are, well,
interesting, in places with governments that are even more interesting. India
could seem predictable by comparison.

The report by Russian business daily
Vedomosti on Friday that PBL has signed an agreement to manage the mega-casino
in the Moscow
sticks raises plenty of questions, but apparently none worth commenting on by
PBL.

The Smage report today provides a hint
of what a grubby business the often-corrupt Russian gambling industry is:

Russia’s gambling market has grown at an average
annual rate of 30% for the past five years, according to Laurenty
Gubin, head of communications with Storm International BV, a large Russian casino operator. Until now, the $US6 billion
market has been fractured, with hundreds of smaller operators restricting
growth.

Outside every Moscow underground railway station, small slot
machine halls operate, many of them not much larger than a large, walk-in
closet. These are often unlicensed and
managed by criminal groups with enough clout to ward off local police and
government inspectors.

Mr Gubin says this may all change
if a new law being considered by the Duma, Russia’s parliament, is adopted. Under the bill,
licences to operate gambling premises will cost at least $US1 million and a
plethora of additional regulations will be implemented, including a minimum
number of tables and poker machines.

“The licence and the regulations will cost a lot of money; only big
groups with lots of resources will be able to operate,” Mr Gubin said.
This should force the majority of the smaller players out, leaving the big
operators to eat up their market share.

Peter Fray

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