Bingo comes to Bolivia, by way of Russia
February 9, 2009 - Miami Herald

BY ANNIE MURPHY, Special to The Miami Herald

SANTA CRUZ, Bolivia -- As Washington watches its influence wane in Latin America, Russia is picking up the slack, with military exercises and arms deals in Venezuela, billion-dollar gas pipelines across the continent, and now, casinos in Bolivia.

But Bolivian authorities are worried that foreign-run gambling is far from a boon for the country. Russian-owned Ritzio Entertainment Group is a key player, also operating Bolivia's Bingo Bahiti clubs, best known for both electronic and live bingo, the same game played across the United States.

While bingo in the United States is generally associated with grandparents and retirees, in Bolivia it's catching on with young people.

Diego Castro, 22, is a computer science major. He first started coming to the Egyptian-themed Bingo Bahiti flagship in Santa Cruz for drinks with friends from his university.

''Now I come on my own, and I only order water so I can focus on the bingo,'' Castro said. Like many his age, Castro now favors casinos over bars or parties for socializing.

Ritzio is the largest of the Russian-owned casinos that have turned up in Bolivia over the past five years, as former president and now Prime Minister Vladimir Putin cracked down on gambling.


Three years ago, a law passed in Russia declared that gambling would be barred from cities such as Moscow and St. Petersburg by 2009, and restricted to four remote regions: Kalingrad, Primorye, Altai and Rostov-Krasnodar.

Two years ago, Ritzio earned about $1.6 billion in revenue from its gambling operations and began expanding abroad. In Latin America, it now operates clubs in Bolivia, Colombia and Peru.

According to Bingo Bahiti, the chain earns about $2.5 million a year in Bolivia; the government office that regulates casinos declined to discuss revenue or earnings.

When Bahiti started in Bolivia, there were just a couple of small casinos in the cities of La Paz and Santa Cruz.


Today the chain is the largest in Bolivia, with 15 gaming halls. There are locales even in remote areas of the Amazon, and two mega-casinos are set to open in this year in the cities of El Alto and Santa Cruz.

No two Bolivian cities could be more distinct; impoverished El Alto -- a city of Aymara immigrants built in the cold, high-altitude plains -- cuts a sharp contrast to tropical Santa Cruz, the heart of Bolivia's relatively prosperous eastern lowlands.

''The fact that we're simultaneously opening big clubs in two such different places really shows the universal appeal of Bahiti,'' said Jose María Peñaranda, president of Bingo Bahiti in Bolivia. He says Bahiti is for all ages: Families often come to enjoy lunch at the casino restaurants, and teenage girls often use Bingo Bahiti to hold their elaborate quinceañeras, a Latin American party that is a cross between a sweet 16 and a debutante ball, celebrating a young woman's 15th birthday.

Yet officials like Carlos Bruno of the National Lottery pointed out that most of Bolivia's nine million inhabitants live below the poverty line, and he wonders why international gambling businesses are interested in what he sees as a limited market.

''People have been coming here and setting up gambling establishments in curious places, including small towns in the middle of nowhere. And foreigners just keep opening gambling businesses. We're concerned,'' Bruno said.

Bruno said he is especially worried about money laundering. He says that funds from narcotrafficking and from the bingo halls are being funneled through Santa Cruz, a city of nearly two million that until several decades ago was nothing more than a jungle backwater. But he said that current privacy laws make it difficult to expose wrongdoing.

Further analyzing the situation is Raymond Baker, a fellow at the Center for International Policy in Washington, D.C., and the author of Capitalism's Achilles Heel, which examines illegal money flows.


''If you want to launder money with a casino, there are a whole variety of ways you can do it. Bring some money in, usually cash, buy a lot of chips, go gamble a little bit, then you turn your chips in for a casino check. That check you can then deposit anywhere you want to,'' Baker said.

''I wouldn't have the first idea about who is laundering money or how,'' said Bruno.

But District Attorney Hector Cornejo, who is responsible for casino-related cases in Santa Cruz, said he believes that money laundering is only the start of problems tied to gambling in Santa Cruz.

He's currently investigating Russian- and Brazilian-owned casinos, which he says have multiplied in recent years. When Brazil and Russia tightened their gambling laws over the past decade, people from those countries relocated to Bolivia, Cornejo said.

Lax gambling laws that date back to 1920s combined with drug money and rampant corruption, have made Santa Cruz an ''unregulated paradise,'' he said.

''It's a secret everyone knows about, and no one discusses, and it's getting out of control. Everything is related -- arms trafficking, money laundering, casinos, human trafficking, prostitution, fraud and organized mafias,'' said Cornejo.

So far he has closed down several casinos.

None of Cornejo's cases involve Bingo Bahiti, which he says has a special license directly with the national government and is being monitored directly by the National Lottery.

Meanwhile, crime rates in Santa Cruz are soaring. Theft used to be the city's most serious crime, but a string of recent murders carried out by hired killers signaled a serious shift.

''Now you have dead people turning up daily,'' Cornejo said.

He says the increase in crime is directly linked to the spread of foreign-run casinos and can be traced back to the highest echelons of society in Santa Cruz, making citizens -- including local officials and Bolivian journalists -- hesitant to participate in investigations.

''If there isn't law and order, this is going to become a no-man's land,'' he said. Meanwhile, casinos like Bingo Bahiti remain popular among ordinary Bolivians.

On a recent Friday night, Marcelo Saravia and his wife played electronic bingo at the half-full Bahiti flagship. They come here once or twice a month and play games in dollars rather than bolivianos. Of his choice of currency, Saravia grinned and said, "You have to play big to win big.''