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70 I Eurasia bne March 2023
The minimum investment required by the government is $300mn. The last time Mongolia saw an investment in tourism on that scale occurred in 2015, when Shangri-La opened up a $500mn hotel, office and shopping complex in Ulaanbaatar.
As for Mongolia’s take, a tax rate of
40% on profits would apply, equal to what is currently required of casinos in Macau. A portion of the revenues would go back into tourism development.
The legislation would also require
the operator to make all transactions through local banks.
"The aim was to create a real investment that would be adapted to the specifics
of our country,” Nyambaatar Khishgee, Mongolia’s Minister for Justice,
said during a briefing to Parliament members last month. “Three hundred million is the threshold needed to make a real investment from scratch, not just to rent a ready-made building and start operations.” Casinos would be permitted within a 1,000-hectare free trade zone in Khushigt Valley, near the New Ulaanbaatar International Airport. The zone, set up last year and approved by Parliament, is located 50 km south of the capital. The law protects whoever
jumps in first, allowing that operator
a five-year monopoly before licences would be made available to companies.
A majority of members in the Standing Committee that heard the first reading supported the motion to continue discussions of the law in Parliament.
Zolbayar Enkhbaatar, editor-in-chief of the financial newsletter Inside Mongolia, says casinos could help boost the economy and previous failures to pass
a casino law shouldn’t deter legislators.
“It's a good step that we're even discussing this topic, because casinos used to be kind of a banned topic in Mongolia,” said Zolbayar.
But Zolbayar sees the rule that bans Mongolian citizens, along with the
high entry cost for investors, as major impediments to development. “Because of those reasons, very few investors might be interested, if any,” he said.
While there are no currently no physical casinos in Mongolia, a number of online gaming platforms have emerged, although most of them are unauthorised. Several have been blocked in recent weeks
by the Communications Regulatory Commission of Mongolia, according to News.mn, a local news portal.
While gambling in casinos would be outlawed under the law under review, the law would not ban gambling at short-track horse-racing events. Mongolia already has a culture of horse racing but those events are long-distance riding, and until now betting has been informal and usually between friends.
“The adoption of these laws has the potential to open space for new kinds of businesses, including horse stable facilities, betting software and rider training,” said Zolbayar.
One change from the norm is that the new law would require that jockeys are certified professional riders. This rule would prevent children – who serve as jockeys during summer festival races – from entering professional races.
Michael Kohn has covered Mongolia since 1998, reporting on social, political and economic changes in the country during its transition and growth. He has written travel guidebooks on Mongolia and two books: Dateline Mongolia and Lama of the Gobi.
Hopelessness grows as Azerbaijan’s blockade of Nagorno-Karabakh enters third month
Neil Hauer in Goris
The sleepy southern Armenian city of Goris rarely finds itself at the centre of events. Nestled amid high mountains in Armenia’s southernmost province of Syunik, its elegant stone houses and broad central square have the relaxed air of a place where there is rarely much of importance taking place.
But these days, the town attracts a menagerie of foreign visitors: EU and UN cars drive by in small convoys, flags waving in the wind; Russian
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peacekeepers in their camouflage uniforms and enormous Kamaz trucks are omnipresent; alongside them are several hundred other civilians whose lilting, accented Armenian sets them slightly apart from the locals – Karabakh Armenians, trapped here for more than two months as Azerbaijan’s blockade of Nagorno-Karabakh grinds on.
Following its victory in the 2020 Second Karabakh War, in which it recaptured three-quarters of the territory held by the unrecognised Republic of Artsakh
(also known as Nagorno-Karabakh), Azerbaijan has continued to seek control over the rump remainder of Karabakh.
These efforts have only intensified since Russia, whose peacekeepers in Karabakh guarantee the 2020 ceasefire agreement, invaded Ukraine a year ago, a move which has sapped Moscow’s strength and influence.
While most of Azerbaijan’s moves have come in the form of military offensives, Baku hit upon a new tactic in December,