FEW CASINOS IN TURKMENISTAN

UNCLAS SECTION 01 OF 02 ASHGABAT 000185

SENSITIVE

SIPDIS

STATE FOR SCA/CEN; EEB
COMMERCE FOR EHOUSE/DSTARKS

E.O. 12958: N/A
TAGS: BTIO ECON EINV PGOV SOCI TX
SUBJECT: FEW CASINOS IN TURKMENISTAN

REF: ASHGABAT 158

ASHGABAT 00000185 001.2 OF 002



1. (U) Sensitive but unclassified. Not for public Internet.


2. (SBU) SUMMARY: Currently there are three casinos operating
in Turkmenistan. A Turkish company owns all three. Former
President Niyazov allowed the casinos to open in the 1990s,
and the current president has shown no sign of closing them.
At the same time, there are no plans to allow more casinos in
the country, except perhaps in the Avaza Tourist Zone.
END SUMMARY.


2. (SBU) A little-known Turkish firm, Tursen, owns the three
casinos in Turkmenistan. All three are located in Ashgabat.
These casinos are: the Grand Casino in the Grand Turkmen
Hotel, the Florida Casino in the Florida Restaurant and the Ak
Altyn Casino in the Ak Altyn Plaza Hotel. As the largest of
the three, the Grand Casino has 113 gaming tables and 150 slot
and video poker machines. Former director of the Grand
Turkmen Hotel Ishan Faizullayev told Embassy economic
assistant that the casinos were established in 1994 with the
blessing of former President Niyazov. Turkmen and foreign
tourists reportedly frequented the casinos during the 1990s.
Today, the three casinos appear to attract fewer and fewer
gamblers.


3. (SBU) Faizullayev mentioned that Niyazov imposed
maximum winnings of $5,000 per game. He explained
that during any given game, a person could only collect
$5,000, even if he won $1 million from one slot machine
pull. Faizullayev added that President Berdimuhamedov has
not changed this policy. The State Committee for Tourism
and Sports also receives some share of the casinos' profits.
The percentage is unknown, as contracts, not gambling laws,
regulate the percentage of profits to be paid to the
government. In addition, the Committee for Tourism and Sports
reportedly earns between $300,000 to 500,000 per year from
renting hotel space to the casinos.


4. (SBU) As for clientele, wealthy Turkmen, their family
members, and some foreigners frequent the casinos. For the
children of some high-ranking officials, casinos are also
popular hangouts. Casino reps added that rich Iranians seem
to "drain their pockets" in Turkmen casinos, as gambling is
illegal in Iran and Ashgabat is a convenient destination. In
addition, the gaming tables have a minimum bet of $5, while
slot and video poker machines take $1 minimum bets. However,
since the average Turkmen earns between $200 and $300 a month,
gambling is cost prohibitive for most Turkmen.


5. (SBU) There are no gambling regulations or laws in
Turkmenistan. The GOTX approves a casino for operation by
issuing a license. Obtaining a gambling license, however, can
take years. At the same time, Berdimuhamedov has offered
foreign investors the opportunity to open one major gambling
complex in the Awaza national tourist zone on the Caspian
coast (reftel). Foreign investors have reportedly been told
that the licensing process would be expedited for an Avaza
gaming complex. The Head of the Avaza Committee, who reports
to the Turkmen President, recently stated that there will be
one or two gambling facilities in Avaza, but no more, because
President Berdimuhamedov does not want to detract from his
goal of making Avaza a family-friendly vacation destination.


6. (SBU) COMMENT: Unlike many former Soviet republics,
Turkmenistan has few casinos. These casinos cater to a small,
elite crowd of rich and powerful Turkmen and well-off
foreigners. Given the president's and government's
conservative and cautious social policies, it is doubtful that
the gaming industry will ever expand beyond some secluded

ASHGABAT 00000185 002.2 OF 002


rooms in a few hotels. END COMMENT.

CURRAN