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RUSSIA
IGT, one of the world’s foremost slot machine manufacturers, remains committed to its
customers in Russia, however. James Boje, Managing Director of IGT Europe, asked about
July 2007 saw more upheaval in Russia's gaming industry, with its 'prohibition' coming in the stagnant Russian market, said: “I wouldn’t say the market is stagnant, it’s more of a
to force on the first of the month. Interestingly, only 38 Russian regions brought the law shrinking market because they’re closing it down.
into full effect immediately; with budget losses in mind, most places apparently deferred “IGT came back into the market, faced many challenges and we’re there now, we have a
the ban for a year. Moscow and St Petersburg did not introduce their own specific bans, as presence and we have no intention of moving away from that market. It’s been brought
spokespeople said the federal law was sufficient. under the wings of IGT Europe now, and we’re staying in touch with that market. We have a
The new law in Russia forbids casinos less than 800m2 and slot halls smaller than representative office in Moscow and all of our staff are still intact there.
200m2; further restrictions are based on the assets of the owners, a minimum number of “We’re committed to the market, we’re loyal to our customers and we’re going to be there.
slot machines and tables. The restrictions will, as predicted, force out the ‘mom and pop’ As the market evolves and changes, we’ll be there. I don’t have a crystal ball, no-one knows
operators, the smaller businesses, initially – but with gambling forced to move from cities what will happen in Russia, but we have very good and loyal customers there and we have to
and towns to four allocated zones in the not too distant future, eventually everyone will feel stick by them.
the squeeze. “The time and effort that we have invested in Russia has definitely not been in vain –
whatever happens in the future with the gaming industry in Russia, IGT will be there. John
Gomes spent over three years building relationships with our customers in Russia, and that
work has been very important to IGT.”
But things are changing, and fast, with an eye on the new law which came into effect July
2007. James continued: “I don’t think anyone’s selling product in Russia, I don’t think any-
one’s buying anything either; the market is very difficult at the moment and the complexity
of the whole politicisation of the market makes things more difficult, since July 1 since the
new law came into effect.
“Things are changing – some people are going to wait and see what happens with the
elections next year, what will happen in the market after that. Remember, everyone is sup-
posed to be in the four allocated zones by 2009, and that’s not far away.”
One of the main threats to slot manufacturers with the collapse of gaming as we know it in
Russia is the relative flood of second-hand slot machines coming out of the country and
popping up in emerging markets elsewhere. Even IGT face competition from this, as James
explained: “Within Russia there’s a lot of machines being stored. As far as second-hand
machines in the market go, I think they are traveling far and wide. They’ll be moving toward
Latin America and Africa, most likely, finding their way into other markets. It’s a challenge all
manufacturers face, when these second-hand or refurbished machines come into a market.”
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