"The operation of a casino will create a serious reputational risk for the government"

The People's Artist of Azerbaijan, head of the "Sea Breeze" project, and businessman Emin Agalarov, expressed his desire to restore casino activities during an interview with Russian journalist Ksenia Sobchak, which has sparked extensive discussions. In the interview, Agalarov mentioned that this initiative is currently under consideration by the state and spoke about its potential impact on the country's economy and social environment.

"Sea Breeze would benefit greatly if we could integrate the casino business. Currently, this issue is being considered by the state," he said.

The operation of casinos in Azerbaijan was abolished in 1998 by the late President Heydar Aliyev. Is it appropriate for the state to reconsider this issue now at the request of someone close to the ruling family? What could be the economic impacts if casino operations are restored?

Lawyer and expert on banking and financial matters, Akram Hasanov, answered questions from ASTNA on the topic.

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Question: The People's Artist of Azerbaijan, head of the "Sea Breeze" project, and businessman Emin Agalarov wants to integrate the casino business into Azerbaijan. What is your opinion on this idea?

Answer: Personally, I have a negative view of gambling, primarily because I am a Muslim. Islam strictly forbids gambling. However, I acknowledge that the majority of our people are no longer strictly Muslim. Most are either deists or atheists. Therefore, it would not be appropriate to approach the issue purely from a religious perspective, with one exception. The opinion of the local population should be considered. The majority of the population in Nardaran is religious, and they would oppose this. Therefore, even if casinos are permitted, they should not be located in Nardaran.

Question: Emin Agalarov said that this issue is currently under consideration by the state. Casino operations in Azerbaijan were legally abolished in 1998. Now, at the request of someone close to the ruling family, the state is revisiting the matter. What does this mean? Is it legally correct?

Answer: Legally, there is no issue. Laws can always be changed. The matter should be analyzed more from a moral and economic context. In addition to the religious aspect, there is the legacy of Heydar Aliyev. Yes, while Heydar Aliyev's path has been the official ideology for the last 20 years, deviations from it have been increasing. Even people he criticized have been appointed to positions. But the casino issue is a special case. On January 27, 1998, Heydar Aliyev put an end to this matter with Decree No. 730 "On some measures in the field of combating economic crime in the Republic of Azerbaijan." The decree stated that "the number of casinos, totalizators, and gambling establishments holding cash-prize games, which contradict our national values, has increased. These activities, in addition to harming the Azerbaijani economy, create a favorable environment for the laundering of illegal funds and the commission of other crimes, negatively affecting the upbringing and moral well-being of certain segments of our population, especially the younger generation." What has changed now that we need to invalidate this decree? This will pose a serious reputational risk for the government.

Question: From a financial and revenue perspective, if casino operations are restored, what could be the economic impacts? Would it be beneficial in terms of finance and revenue?

Answer: It will probably be beneficial. Many countries have casinos, and they generate significant income. However, how this will play out in reality is unclear. Even if casinos and brothels are legalized in Azerbaijan, investments in these areas are unlikely to flow in because there is no rule of law, the legal environment is unstable, and monopolies prevail. In casinos, there will be manipulation, and in brothels, secret recordings will be made for blackmail. Therefore, no one will come. Even for the legalization of gambling, prostitution, and drugs, we need to first establish a proper legal and judicial system in the country. Gamblers, prostitutes, alcoholics, and drug addicts will demand the rule of law first. If it's not provided, they will go to countries where the rule of law exists, not here.

Question: At the same time, casinos are often characterized as places for money laundering. In this regard, who would benefit if casino operations are restored?

Answer: Money laundering is already commonplace here. Corruption is rampant. Officials do not declare their income and expenses, real estate, and commercial legal entity registers are closed, and a lack of transparency prevails. Casinos will simply add another crooked way for money laundering, especially for legalizing funds abroad. For example, someone might try to prove they legally possess money abroad by claiming they won it in a local casino. But the civilized world already knows our tricks, so they are unlikely to consider money won in our casinos as clean funds.

Question: There is also a trend in Azerbaijan where gambling and chance-based games are legalized and placed under state control. The state often acts as a monopolist in this area, as with Topaz. Could the state take control of casino games in this way? If so, what would it bring to Azerbaijan?

Answer: There is no doubt that this sector will be monopolized. And because of that, there will be little interest in coming here. Who would trust a government and oligarchs that cheat their own citizens?

Question: What are your proposals regarding the casino business in Azerbaijan?

Answer: There is no prospect for this sector here. I suggest abandoning this idea. There are many other directions for economic development. But in any case, a proper legal environment must be established first.