Monday, September 14

Kapchagay



At the feet of Nagarjuna (creator of the Prajnaparamita sutra, carved here onto boulders by Vajrayana Dzhungars in the 16th-18th centuries), lies Las Vegas of the Steppe.

The Ili River flows into the man-made Kapachagay reservoir, and through the races of the hydro-electric turbines, on its way to Lake Balkhash. The area is home to 50 spanking casinos, and a gambling industry 'measured in the tens of billions of dollars'.

At the time of Kazakh independence in 1991, the per capita GDP was around $1500 and a regulatory-collapse, coupled with the dreary post-Soviet entertainment culture, spawned a home-brewed gaming scene in Almaty. Little bingo parlors and pinball parlors run by new mom-and-pop 'entrepreneurs' sprang up everywhere. Aleksander recounts seeing one in the spare kitchen of the kindergarten next door. By 2007, this homegrown industry had grown to 132 casinos, over 2,000 slot rooms, and 53 betting shops. With per-capita GDP crossing $10000,  the promise of larger-and-larger oil/gas revenues to come, the need to isolate the social costs of gambling, and the desire to bring this wild-east under control of the ruling elites, President Nazarbayev promulgated a new law that restricted gambling in Kazakhstan to two zones - around Kapchagay, and around Schuchinsk. Most of the mom-and-pop slot rooms migrated to Bishkek, went underground, or got converted to discos. The big Malaysia, Macau and Monaco-based gaming consortia moved in, as did the World Poker Tournament, developing the James Bond environment they think they can sell to Russian and Chinese high-rollers. It costs about USD 500 to enter some of these casinos (you get some amount of chips to play as part of admission), and the market seems to consist of young men from as far afield as Baku and Beijing. The 'size of the opportunity' is large enough for Kazakhstan to hold it first Gaming Congress recently, where, the agenda says the following were discussed:

the mechanism and specificity of online gambling; legislative regulation and taxation of gambling business in Kazakhstan; how to attract players to casinos: shows and entertainment programs as a lever for influencing; success stories and tricks of creating a successful casino from owners of the largest casinos in Kazakhstan; analysis of gambling zones in Kazakhstan: how to choose the most profitable area; modernization methods of lotteries to increase their popularity; approaches to attract investors to casinos ...

(At the hotel lobby in Almaty, where the gambling congressmen were beginning to congregate, someone asked me that billion dollar question - erm, what are bitcoins? )

Our friend Natalya works in one of these casinos as a hostess. Her new husband is employed as a driver by the gaming industry. Local opinion in Kapchagay is in grudging admiration of the boom, and soft jobs, that the gambling industry has brought. At the time of the 2007 announcement, apartment prices in Kapchagay went up overnight from $2000 to $10000, and longtime residents feared being priced out of their cinderblock houses by hordes of high-rollers. But the casinos have a huge appetite for service workers - cooks, maids, bouncers, cashiers, drivers to take customers around, bar-girls to sit on their laps.




From a story in the NYT:

But one of the chief selling points of a major gambling center on the Central Asian steppe is also among the chief sources of anxiety among residents: Chinese gamblers. The Chinese appetite for gambling may stoke investment fervor from Macau to Malaysia, but for many Kazakhs the idea of encouraging hundreds of thousands of Chinese visitors to cross the border 400 miles to the east raises the specter of an invasion.

“This town will be a lot like Hong Kong,” said Sayassat Yusenbaev, 28, a businessman having dinner at a Kapchagai restaurant with friends from his office.

Not so, said another man at the table, Sayassat Dyussembayev. “People in general are feeling negative about the Chinese, but they don’t need to worry: the Chinese will come in large groups and stick together in one casino, like a herd,” he said.

People in Kapchagai say they share the widely held belief in Kazakhstan that the Chinese are seeking to economically colonize their sparsely populated neighbor. “They already have taken over the markets around the border,” said Mr. Bakiev, the grocer. “They can buy everything here.”



The Ili river flows into the Kapchagay dam.

The 140 km long Kapchagay dam was completed in 1969; they began slowly filling the reservoir in 1970 over a period of 20 years. Like most 'large hydroelectric' projects, it was though the lake would provide an abundant source of power for Almaty, and irrigation for arid farming in the region. However, environmentalists have expressed deep concerns about its environmental impact upon Lake Balkhash. Between 1970 and 1985, the volume of Lake Balkhash declined by 39 cubic kms, dropping 2 meters in depth. Later, with a moratorium on further filling of the reservoir,  this situation improved somewhat; today, the volume of Balkhash increased a bit once more due to additional river discharge from China, although the water quality had been dramatically reduced and it has become increasingly saline at the Kapchagay side, which is twice as salty as the southwestern end. The 'beaches' around the reservoir attract hordes of summer weekenders from Almaty (a hour away without traffic), and the popular ones are vistas of empty beer bottles and trash. On the road out of Almaty rise billboard after billboard, each advertising a different Russian pop-tart and the Kapchagay casino she will be twerking in.

Below, a ride through Kapchagay and across the reservoir.




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