Kazakhstan is Becoming Kaz Vegas

Reconstruction of the Gambling Industry

Kazakhstan began to make changes in the gambling industry approximately at the same time as Russia. The law № 219-3 "On Gambling Business" was approved in the spring of 2007. According to it, all casinos in Kazakhstan should be transferred to the two gambling zones, especially created for this purpose:

1. Southern - It is located in the Almaty Region on the coast of the Kapchagay reservoir.
2. Northern – This zone is located in the Shchuchyn district of the Akmola Region next to the capital of the country Astana.

At that time Kazakhstan had 150 casinos. Fifty-two of them were present in Almaty. Their owners were ready to defend their business using weapon. They believed that this law could negatively affect the gambling business, contribute to appearance of underground casinos, and cut thousands jobs. However the government suppressed the rebellion and insisted on the fact that the availability of casinos on the designated territory would help to regulate their activities, increase tax proceeds, and solve the problem of gambling addiction.

Casinos were forced to move. To be sure, not all casinos could afford this, since this process required huge investments, not to mention the higher taxes. For example, it was necessary to pay $8,000 per each table, as opposed to $2,500 in 2007. Many casinos in Almaty started calling themselves poker rooms, bingo clubs, and other fake gambling houses. Many of them became restaurants and nightclubs. The others moved to Bishkek, the capital of neighboring Kyrgyzstan, which is located in the three-hour drive from Almaty. Currently the Kapchagay gaming zone has 12 casinos. The Shchuchyn gambling zone offers 5 establishments, which meet all the international requirements.

"Almost all legal casinos in Kapchagay are owned by Russians, while the illegal gambling houses are owned by citizens of Uzbekistan" - said Stanislav Ogai, the president of Kazakhstan Gambling Association:

Astoria, Prince (the owner is not from Russia, but all managers are Russians), Flamingo, Orion, Alladin, Cosmos, Sun City were taken on lease by Russians. They made repairs and recruited a new staff. Gambling is actually controlled by Russians.

These casinos satisfy the needs of the local high rollers. They focus on wealthy middle-aged citizens who lack adrenaline. This category of players attends casinos several times per week and makes high bets. Most citizens of Kazakhstan can hardly afford to attend casinos, since in order to enter a casino, you have to buy chips whose price varies from $300 to $500.

Relative Success

Thus, the law on gambling games adopted in 2007 was partially successful: the gambling business was stepped out of the shadow. Tax revenues rose sharply (from $4.8 million in 2007 to $33.5 million in 2012).

Gulsum Jalyalitdenova, a spokeswoman for the Kazakhstan State Agency for Sport and Physical Education, believes that strict rules are the best way to prevent crimes and social problems caused by gambling:

There are only two possible ways to regulate gambling: it is possible either to ban it fully or limit the location of gambling houses with the strict qualification requirements. The total ban often leads to appearance of underground casinos, which are controlled by organized crime groups.

We can state that the development of gambling business in Kazakhstan is more focused than in Russia. The difference in approaches is explained well by Alexei Mozhaev, a representative of the Russian company East Casino Management:

The attitude towards gambling in Russia and in Kazakhstan differs. If in Kazakhstan areas are located inside large cities, in Russia casinos were built from scratch in the open field. Firstly, investments in the open field or in a place that contains at least a minimum infrastructure differ significantly. Secondly, the areas provided for gambling in Kazakhstan are not changed by the authorities. In Russia, there is a mess. The licenses used to be provided for 10 years. Now one of the zones (in the Krasnodar Krai) is about to be closed. Casinos were opened. The funds were invested. And after that, they were said that they had to move to Anapa or Sochi. As we can see, in Kazakhstan the invested money will constantly bring profits.

Prospects

In early June, it was announced that the Big Lifestyle Development (Seychelles) Ltd. (BLDL) would be an exclusive partner for sales and marketing for the new casino resort called Tengri Resort. The developer received exclusive rights to the construction of objects in the region. It is expected that several integrated casino hotels will be built.

At the moment, the company is constructing Tengri Resort in the Almaty Region. It is supposed to be a year-round resort. Tengri Resort will include hotels, residences, casinos, golf courses, shops, race tracks, an amusement park called Silk Road, and a marina. On the territory of the complex you will be able to find medical and educational establishments.

The resort will occupy an area of 6.5 hectares. A lake that is 140 kilometers long is located from one side. From the other side, there is a highway. A high-speed rail is currently under construction. It is expected that this fragment of the railway will become a part of the Silk Road, which will connect Beijing and Amsterdam. A new international airport is being built near Tengri Resort. Its construction is being funded by the Chinese government.

As for the Big Lifestyle, it has been known that it is actively involved in various projects all over Asia. This company has a vast experience in the field of gambling, sports, and inter-state relations. The corporation took part in developing the Silk Road project and provided consulting services for elaborating the design of the Olympic stadiums. Nowadays the company owns the rights to organize international sporting events and develop entertainment establishments.

Steve Wynn’s Visit

One month ago, the meeting of Steven Wynn, a CEO of Wynn Resorts, with the President of Kazakhstan Nursultan Nazarbayev took place on May 25 in Astana.

A spokeswoman of the President reported that they had discussed development of tourism in the country, as well as cooperation in joint projects.

During this meeting, they discussed the development of the tourism industry and hotel business in Kazakhstan, - said the spokeswoman. - In addition, the prospects for implementation of joint projects within the framework of investment activity were discussed.

The spokesmen of the President of Kazakhstan did not make official announcements on cooperation in developing of the resort in the Almaty Region. Nevertheless, this issue was most likely discussed, since the billionaire said that he intended to invest in the construction of a casino in one of the CIS countries. However he did not mention this state. According to unofficial sources, the Steven Wynn’s visit was associated with the development on the territory of Kazakhstan.

According to rumors, the developer acquired the exclusive gaming concession in the Almaty Region, which included the construction of several fully integrated casino resorts. As it was supposed, the development of gambling industry in Kazakhstan will take place around the new international airport that is being built as a part of the Silk Road project. The airport, acting as a central hub, will be within a 5-hour flight for half the world's population.

Taking into account the fact that the report of BLDL also mentioned the developer, who had received exclusive rights to build in the region and had an intention to open a number of integrated casino hotels, we could make a conclusion that it was one and the same person: Steven Winn and his Wynn Resorts. However the prospects of Kazakhstan, when such a monster enters its gambling market, seem to be amazing.

Iran Wants to Build a Casino in the Kenderli Resort

The Kenderli resort complex is located on the coast of the Caspian Sea, 210 km from Aktau. There are all conditions for amazing recreations on the shore of the warm sea gulf. That is why the Kenderli resort has become popular over 12 years not only among many Kazakhstanis but also among visitors from other regions. During the season, which lasts only 4 months, thousands of tourists from Kazakhstan and other states, especially from Iran, want to attend this resort. Therefore, Kenderli is waiting for a large construction project.

It should be noted that there is a program for development of national tourism projects in Kazakhstan. Their costs reach about 7.653 billion dollars. The development of the Kenderli resort is a part of this program, and the Kenderli project costs roughly $3.3 billion. The investments that will have been provided by 2020 reach 1.96 billion dollars. According to Daniyar Bektibaev, a Vice Head of the Committee for Tourism in the Ministry of Industry and New Technologies:

The project involves the construction of 22 hotels and 16.4 thousand residences with 60 thousand beds (among them, 40 thousand accommodation places are intended for tourists and 20 thousand beds are designed for employees and their families). According to the project, it is necessary to build urban retail centers, indoor and outdoor sports facilities, three golf courses, a marina, and various public facilities for the local population.

Investors from Iran are interested in the project for development of the Kenderli resort. The Iranian tourism companies offer to open casinos there, which will make this resort very attractive for Iranian tourists. Kenderli was attended by representatives of the Iranian Almas Tejerat holding company in spring. They discussed a possibility to invest in this Kazakhstan’s resort. Investors want to come back several times.

According to travel agencies of Iran, the main flow of Iranian tourists moves towards Dubai, Turkey, Georgia, and Armenia. Taking into account the fact that the flight from the Iranian capital Tehran with a population of 20 million individuals to Kenderli lasts for an hour, we can assume that players will prefer the casinos that are located nearer, provided that the same high level of services is available. The biggest problem is the lack of airport in Kenderli. However this problem is now being actively solved. Rakhimbek Amirzhanov, a Deputy Akim of the Kazakhstan's Mangystau Region, said: "Today we are negotiating, and we have already received an offer from Chinese companies that they are willing to invest in the construction of an airport in Kenderli".

The companies can face another obstacle that will be able to affect the construction of casinos in Kenderli. We are talking about the third gaming zone. However it is being constructed: Maira Aisina, a Member of the Parliament of Kazakhstan, appealed to the Prime Minister Karim Masimov to consider the possibility of opening a casino. And local authorities supported this initiative:

As Deputy Akim of the Region, I believe that the third zone can serve as a great incentive for the development of Kenderli in Kazakhstan (apart from Borovoye and Kapchagai). The population of the West Kazakhstan Region has quite high incomes. I have analyzed the situation. It is difficult to find a ticket to flights from Aktau to Tbilisi, because a lot of oil industry workers fly to Georgia where gambling is not banned. Gambling is a vicious passion, but it exists. Gamblers cannot be eliminated. The police of Aktau permanently close underground casinos. What about opening a new official gaming zone in the West Kazakhstan Region? As for the development of Kenderli, this will be very useful, "- said Rakhimbek Amirzhanov -." We could attract currency to our republic. Now this money is flown abroad. Moreover, Kenderli is located far from the towns, so it will be easy to maintain the security. I believe that the West Kazakhstan Region requires a gaming zone.

Thus, gaming zones of Kazakhstan are one of the most successful examples on the gambling market in the CIS countries. Nowadays there are over fifteen casinos and numerous bookmakers in the country. However companies are still investing in the gambling industry, which occurs due to low prices for licenses and a steady flow of gamblers. At the moment, Kaz Vegas is in its infancy. However even Las Vegas was built from scratch.