Sochi Casinos Boast 11% Growth in Foreign Tourism in 2018

Tuesday, February 19th, 2019 | Written by April Bergman
Sochi Casinos Boast 11% Growth in Foreign Tourism in 2018

Sochi wants to take its place alongside Macau, Las Vegas, and Monaco as a premier casino destination spot in the coming years. That is the message that Dmitry Anfinogenov, a spokesman for the Krasnaya Polyana gambling zone in Russia, has for the world.

Krasnaya Polyana is one of four special gambling zones in the Russian Federation. It is on the Black Sea Coast of Southern Russia. The gambling zone’s main casino city is Sochi.

Mr. Anfinogenov, who is Krasnaya Polyana’s Director of Development, said foreign tourist visits to the region increased by 11% in 2018. That includes over 850,000 tourists from 146 different countries who visited the casinos in the Krasnaya Polyana region.

Anfinogenov and his higher-ups in the Russian government want to assure even bigger growth in the coming years. The development director believes 2019 will see another 10% increase in foreign visitors. By 2020, the total will top 1 million international tourists.

Direct Flights to Krasnaya Polyana

To foster visits, the gambling zone’s officials are going to have to build world class infrastructure. In this case, the infrastructure is making improvements to airports in the region to foster international flights.

That means better coordination with airline executives in China, India, and the UAE. Anfinogenov said, “The priority task of the gambling zone in 2019 is to establish direct flights with countries such as China, India, and the United Arab Emirates.”

He added, “Gambling is banned in all these three countries, but the demand for gambling has remained [in those countries], so players will be able to gamble both in Las Vegas, Macau, Monaco, and in Sochi.”

How Sochi Could Become a Casino Capital

If it sounds unrealistic that Sochi might become an equal to Las Vegas or Macau, one has to remember that those destination cities have not always been gaming capitals. Twenty years ago, Macau was a Portuguese colony with a casino gaming monopoly. As a foreign enclave on the southern coast of China, it was a gambling backwater.

Beijing opened the door to foreign investments in 2001 and 2002. Licensing took place in those years and the Venetian Macau opened in 2004 to much acclaim. Even then, flights from the mainland were still sparse. It took Macau building world class airport facilities to transform the city into the world’s most lucrative gaming city.

Las Vegas’s Rise to Prominence

70 years before Macau’s rise began, Las Vegas was getting its start. In 1931, Nevada legalized casino gambling to generate tax revenues during the Great Depression. Los Angeles was becoming a major US city in those years and Las Vegas’ proximity to LA made it a possible lucrative resort city.

It took the building of the Hoover Dam to make living in the desert city feasible. It took better roads between LA and Vegas and, ultimately, first-rate airports to make the trip easier. Even then, it took 15 years and a booming post-war economy to turn Las Vegas into the casino capital it became.

The Creation of Monte Carlo

In the 19th century, Monaco was a tiny principality on the French Riviera. Something of a relic of Medieval Europe, the House of Grimaldi was bankrupt and needed a way to generate revenues. Germany had been the traditional casino capital of Europe earlier in the century, because it was a patchwork of 200 states and principalities, each with their own laws.

Prussia’s unification of Germany into a modern nation-state assures German laws would become more uniform. Francois and Louis Blanc needed to relocate their casinos and Monaco offered them sanctuary. Monte Carlo proved to be the perfect casino enclave in the Victorian Age, but no one would have predicted its rise only a few years earlier.

Obstacles to Sochi’s Rise

Sochi has obstacles that those three cities did not face. Monte Carlo became the capital of European gambling at a time when the long Bismarckian peace and the Age of Imperialism made Europe the richest it had ever been. National borders hardly mattered, while railroad construction made it easy for tourists from all over the continent flock to Monaco’s casinos.

Before Las Vegas was an international tourist destination, it became America’s favorite tourist location. The rise of Las Vegas coincided with the rise of the American middle class in the 1950s and 1960s. Macau became China’s casino destination spot before it became an international hub. The rise of Macau also coincided with the rise of the Chinese middle class in the 2000s and 2010s.

Russia Banks on Foreign High Rollers

In all three cases, mass prosperity in the home countries built the city into a gambling retreat — and then it became a foreign tourist area. The Russian Federation wants to build Sochi into a foreign tourist destination, but without the foundation of mass prosperity in the home country.

Of course, foreign travel is getting easier all the time. Wealthy elites are becoming more cosmopolitan. Appealing to the wealthy elites of China, India, and the UAE might pay off for Sochi. The area is nice enough. Prior to the 2014 Winter Olympics, the Russian Federation and the International Olympic Committee spent $50 billion to turn Sochi into a world class resort city.

If Sochi can record a string of years where tourism growth reaches 10%, then it soon will be a major player in the international casino gambling industry. The path will be different than it was for Monte Carlo, Las Vegas, and Macau. And if Sochi cannot reach those lofty heights, it might one day become comparable to Singapore — which has a pretty nice casino industry.