Russia Looks To Gambling To Fund Crimea Annexation
Revenues from gambling are used to finance many social causes in the countries that permit legal gambling. These include education, infrastructure, health care, housing and many more. Generally the idea is to take advantage of revenues which would otherwise be lost to illegal gambling. This is the general rationale behind legalizing gambling.
Russia however has found a unique way in which to finance its unprecedented annexation of Crimea in the Ukraine. There are reports that the Kremlin is looking to fund its newly annexed territory by declaring it a “gambling zone”. According to reports Russian officials discussed this possibility on March 21 at a discussion led by Deputy Prime Minister Dmitry Kozak. There is a deadline of April 15 by which the Russian ministries of economy, finance and regional development must come up with a plan for the ambitions gambling zone that includes expected revenues.
Crimea is going to cost Russia a fortune to bankroll as it has a fiscal deficit of $1.5 billion this year. The gambling revenues are aimed at making Crimea less dependent on the Russian state budget. Currently gambling in Russia has been banned since 2009 except in four regions.
President Putin has not only political problems due to his invasion of Ukraine but also faces a troubled economy. In terms of the proposal Crimea will be subject to tax break and enjoy the status of a special economic zone.
Russian Prime Minister Dmitry Medvedev summed up the thinking behind declaring Crimea a gambling zone,” Our aim is to make the peninsula as attractive as possible to investors, so that it can generate sufficient income for its own development.”
President Vladimir Putin is continuing to play for the highest stakes. His latest move to create a Macau in Crimea could set a precedent for any tyrant to fund military aggression. We look forward to following this story as it develops.