Interior Ministry closes Internet casino with annual profit nearing 200 mln rubles.

17/7 Tass 139a

MOSCOW, July 17 (Itar-Tass) —— The Russian Interior Ministry’s K (cyber crime) department has closed an Internet casino with the annual profit nearing 200 million rubles, the ministry said on Friday.

“The K department of the ministry together with Belgorod colleagues has stopped the activity of an organized criminal group operating Internet casinos,” the ministry said.

The organizers offered clients to install certain software, which turned their computers into gaming terminals. Such clients monthly transferred from 5 to 10% of their revenues to the illegal business organizers. The latter had about 300 agents in the end.

“The activity was described as Internet cafes or computer clubs on paper. Computer rooms were rented, and software updates were taken from a server located abroad,” the ministry said.

“The minimal stake for gamers was 15 rubles, and there were no restrictions for the maximal stake. About 400 people visited the resource daily. The group gained about 200 million rubles within a year,” the ministry said.

Copyright violation charges were brought, which might be supplemented with illegal enterprise charges.

All Russian casinos and slot machine parlors operating outside the four gaming zones closed down on July 1, 2009.

Then President Vladimir Putin initiated the gaming industry law after the Interior Ministry had held a series of operations to check the financial, tax and sanitary-epidemiological status of gaming facilities in Moscow, which were allegedly linked to the Georgian mob.

Putin voiced concern over the growing dependency of Russians on gaming. “It is a pity that casinos and slot machines are as addictive as alcohol in this country,” he said. In the opinion of Putin, the decision to form four gaming zones was civilized.

The law said that gaming zones would be built on land lots belonging to federal or municipal authorities and not allocated for urban or rural development. The gaming community was supposed to lease the land lots from the federal government.

The law set particular requirements for owners of gaming sites. They must be Russian private legal entities with net assets larger than 600 million rubles.

The law, which entered into force on January 1, 2007, tightened gaming industry requirements and all the gaming sites that failed to meet them closed down. There is no legal gaming in Russia but in four designated zones starting from July 1, 2009. The only exception is made for bookmakers and pari mutuels.

The first law limiting the gaming business in Russia was adopted in 2006. It specified the minimum space of a gaming facility, the minimal distance to schools, colleges, public and administrative buildings, and so on. Institutions, which failed to meet the requirements had to close down by July 1, 2007.

The first legal casino in the former Soviet Union opened at the Moscow Savoy Hotel with a special permission of the government in 1989. The casino designed by a Finnish company had only foreign clients. Another casino opened one year later for foreign and local clients. That casino was put on the Guinness Book of Records.

The first casino dealing in rubles opened in 1991 and gave rise to the gaming business. Moscow alone had about 200 casinos in the end of the 1990s. The first slot machine parlors opened in 1993, and the business boomed by 2002.

There were 800 parlors with 12,000 slot machines in Russia in 1998, and over 2,100 with 35,000 slot machines in the end of 2000. Most of them (20,000 or 63%) were installed in Moscow and St. Petersburg, and another 20% in twelve large regions – Stavropol and Krasnodar territories, Rostov, Moscow, Nizhny Novgorod, Volgograd, Sverdlovsk, Leningrad, Perm and Novosibirsk regions, Udmurtia and Tatarstan.

Many gaming facilities, especially slot machine parlors, became semi-legal in the early 2000s. Slot machines were installed even at bus stops.

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