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Loaded dice? The return of (legal) gambling to Odessa

August 16, 2015

This entry has the potential to, and probably will, wander around the central theme of gambling and by extension events current in Odessa.

By way of background, in June 2009 populist Prime Minister Yulia Tymoshenko championed the banning of gambling in Ukraine.  This, despite her rhetoric at the time regarding the moral corruption of Ukrainian youth (a similar argument she employed to ban pornography around the same time), would be more accurate to perhaps associate with the deaths of 9 people in a gambling/gaming den in Dnepropetrovsk, a city from which she hails, and in a timescale that preceded the run up to the 2010 presidential elections in which she stood – ultimately losing to Viktor Yanukovych.

An argument for the usual knee-jerk populism associated with Yulia Tymosheko and the subsequent ban on gambling (and pornography) can easily be made – particularly when electioneering was on the horizon.

Needless to say, the ban on pornography was never enforced, and the ban on gambling simply pushed gambling (further) into the black economy.  Few gambling/gaming establishments that decided to continue have been prosecuted for pursuing their previously legal pursuits – A lot more Militsia and local politicians became richer through providing a “roof” from prosecution by way of corrupt payments in return for blind eyes or influence.

Now however, it seems the debate about the return of legalised gambling in Ukraine is about to (purposefully) begin – the debate in 57 days from now (countdown clock here).

“The Government wishes to review current legislation and introduce gambling back to Ukraine in a measured way using best practice from other countries.  The effect on jobs will be immediate, the increase in tourism will benefit the country as a whole and income from taxes will greatly assist our reform measures.”  – Arseniy Yatsenyuk.

So be it.

Undoubtedly if legally reintroduced the right way, without cronyism and licensing of family members, taxed and policed  properly, the government stands to see revenues in the $ hundreds of millions and a rapid up-tick in employment – both directly and indirectly associated with what used to be a very vibrant industry.

Naturally, if cronyism and flawed licensing, corrupt policing etc rules the industry, then government revenue will only be in the $tens of millions and whilst there will be a favorable trend in employment, it will be employment in the black/grey economy.

Thus, those “friends of Ukraine” that are currently supporting the nation would be perhaps wise to insure the re-legalisation of gambling is forced to remain in the light.

Red Roller

The re-legalisation of gambling would seemingly fit quite nicely with Governor Saakashvili’s “Singaporean dream” for Odessa.  It would fit with his anticipated drive to make Odessa a porto franco/free port – in his mind that porto franco status being far closer to that of Singapore/Hong Kong regarding degree of autonomy and economic benefit, than that Southampton docks in the UK with no autonomy but favourable customs regime.

Any which way, clearly somewhere in the Governor’s mind, Odessa (or parts thereof) requires becoming a “Special Economic Zone”.  The return of legalised gambling would therefore be a welcome economic “plug-in” where ever Odessa will fit across the spectrum of porto franco/special economic zones that vary vastly globally.  Indeed it would become a “project” to be developed.

It is perhaps little surprise then, that from within the information leaky Saakashvili administration, it is claimed that three casinos are either already under construction or have been given the tacit nod of preemptive approval in Odessa.

It is here that this entry will meander slightly, and readers may, depending upon how loaded their dice, draw inference as to whether future gambling and casinos in Odessa will be run in a way to maximise governmental revenues and white employment – or the alternative reduced government revenues and black/grey employment.

Some months ago the Governor made an appeal for western educated volunteers to assist the Oblast Administration in the gargantuan task ahead of it with regards to reforming the Oblast.  There has (unsurprisingly) been a very large response from such western educated people willing to work (unpaid) for the administration to effect reforms.

Indeed your author is aware of more than 80 such volunteers who have yet to be interviewed – all of whom yesterday receiving the following “holding/pending” email:

Дякуємо Вам за виявлену ініціативу працювати в якості волонтера в ОДА!

На даний час ми формуємо структуру роботи з волонтерами.

Ми плануємо вибрати серед Вас координаторів, через яких ми будемо спілкуватися з волонтерами Вашого профілю.

Робота волонтера-координатора передбачає повну робочу зайнятість, знаходження в ОДА найближчі два місяці.

Звертаємо Вашу увагу, що робота волонтера не передбачає оплати праці. Координатор буде отримувати завдання

від Департаментів ОДА, шукати серед Вас фахівців для вирішення поставлених завдань і відповідати за їх перевірку.

У разі готовності та бажання бути таким координатором надсилайте письмовий відгук та Ваше резюме.

З повагою,

Адміністрація ОДА

Now it has to be said, those in the boiler room behind the Governor are working hard – really hard.  Anybody who visits can see just how hard these people are working.  But that after several months there are still so many volunteers willing to freely help the administration that have not been seen raises questions over the transparency and efficiency of the process – considering there are already dozens of volunteers actively engaged.

Specifically concentrating upon those volunteers that end up with Sasha Borovick who looks after “projects” (are casinos and gambling projects for the Singaporean dream?) within the Administration, there have been some highly visible, and eyebrow raising incidents with regard to recruitment of those that have ended up as his volunteer pool/team.  Incidents that anybody who frequently drops into the Bristol Hotel in Odessa on a weekend cannot have failed to miss over the past months.

The Bristol Hotel on a weekend for the past few months has been home to regular visits (and stays) by a lot of successful businessmen and politicians from Georgia.  Somewhat questionably some of these people have apparently been pre-interviewing/pre-screening volunteers.  They claim to be (and perhaps they are) assisting Misha (Saakashvili) and Zarub (Adeishvili) in the processing of volunteers and their appropriate team placement.

Meanwhile Koba (Nakopia) it is rumoured is involved in the interviewing process for top Oblast positions, such as Oblast architect, customs chief etc –  Not a role for executive search and selection companies?

That this occurs in the open and in a public (if rather swanky) location may indeed make such events legitimate and deliberately transparent – or it may not.

Some may see it as a brazen way to select volunteers for Mr Borovick’s team in “projects” by those affluent and connected that will be submitting “projects” that get the approving nod of the volunteers and are passed further up the chain – rather than being dismissed upon initial presentation.

Questions of conflict of interest, transparency and indeed due diligence when it comes to the source of investment money for “projects” or donations to the “Odessa Development Fund” may arise for those of a cynical disposition in circumstances such as these.

Such cynicism is not necessarily dispelled when others close to certain individuals within the Oblast Adminstration “top table” team pull seemingly pointless stunts when issues of conflict of interest are rumoured.

Sergey Lesyk

Sergey Lesyk

No Sergey Lesyk

No Sergey Lesyk

Simply deleting photographs from website advisory board organigrams removes photographs – it does not remove potential or existing conflicts of interest.  It does raise questions that may have been easily answered.  Upon this matter no more will be said, though perhaps investigative journalists would disagree, and readers be disappointed.

Whatever the case, it is seemingly a far less transparent and organised system than that employed in the selection of district administration heads, and the on-going (and live streamed) prosecutor recruitment drive – although that is facing stiff institutional resistance unsurprisingly, and to the ire of Governor Saakashvili.

It may be that the voluntary and unpaid positions vis a vis paid and official positions, are deserving of less care and less respect for process.  A foolish perspective.

Within a somewhat “unusual” process, there may be nothing untoward.  It may be that all is above board, legitimate and entirely (potential) scandal free.

Certainly the last thing Governor Saakashvili will want is a bad smell around “his team”.  He will not be overly keen to have a bad smell around those that are around his team either.  It is beyond doubt that the actions of the Governor and his team are very closely monitored by those internal and external bodies that remain uncertain as to just how closely to hug him, but understand that he (and team) require continuous support (and guidance) if corruption reduction and development issues in Odessa are to be achieved.  That support Governor Saakashvili will not want to lose.

It is natural that a certain amount of Georgian interest and investment would head the way of Odessa whilst under the leadership of a former Georgian President.  The city and Oblast has huge potential without any shadow of a doubt and getting to see the Governor, be you Georgian or otherwise, has never been easier.

It is also natural to question matters that are not as organsied as they possibly could be.  Issues of efficiency and transparency arise.

It follows thereafter, that questions relating to three casinos apparently under construction/given the tacit administrative nod whilst gambling remains illegal, will also raise questions as to who, how much and from where this investment comes (not to mention how clean the money is) and why certain projects get approved and passed up the decision making tree and others are dismissed by some volunteers that have been in place for months, whilst there are at least 80 suitably qualified and willing people still being kept on “hold” prior to having their energies (freely) employed.

Is this messy impression all simply a matter of a discombobulated approach to the administrative issues surrounding voluntarism within public administration, when the paid administrative personnel are really working very hard in the boiler room generating and implementing change themselves in oder to make the boss look good?  A matter of daily administrative priorities resulting in a disjointed and ad hoc response to a very large response by volunteers?

Who knows what the cards hold?  0, 1, 2 or 3 Georgian owned/co-owned/financed casinos?  A favourable view taken on “projects” submitted from a Georgian origin?  Does it matter anyway as long as a monopoly is avoided?  How white does any investment money have to be – or perhaps how black before it will be refused?

Time will soon tell – but perhaps not until after the October local elections will anybody begin to show their hand.  The 2016 Oblast political landscape need be known before cards are put on the table.

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