According to Russian Industrialists and Entrepreneurs Union, a law forcing gambling out of Moscow and St Petersburg from July next year will deter investment in the industry and should be relaxed.

The Moscow-based Union stated that plans to restrict gambling to four remote regions of the country are prompting local operators to expand abroad and could also lead to the growth of illegal casinos. It said around one-quarter of Russian gamblers would attend these unlawful venues, citing research by the State-run All-Russian Center for the Study of Public Opinion.

Gambling has expanded rapidly in Russia over the past six years after a relaxation of licensing rules led to a proliferation of slot machines in bars, on the streets and in subway stations. Taxes from gaming reached USD 1.3 billion in 2006 but the Union stated that the industry’s 600,000 workers would be reduced by more than ten percent by 2009 if the law were kept in its present form.

Under the Government’s plan, casinos would only be permitted in Russia’s Pacific coast, the Baltic exclave of Kaliningrad, Siberia’s Altai region and around the Azov Sea. The Union stated that these areas are not attracting sufficient international operators but President-Elect Dmitry Medvedev has publically stated that he will carry on with the policies laid out by predecessor Vladimir Putin.