New markets in Russia.
Two companies backed by Macau’s Lawrence Ho have entered into an agreement to develop a casino in Russia’s Far East that hopes to attract gamblers from northern China, but analysts say big questions remain about the project’s viability.
According to Hong Kong stock exchange filings, Summit Ascent Holdings will acquire a 46 per cent stake in a Russian company that holds a 50 per cent share in a venture with a gaming licence and leases on two lots of land in the Primorye Integrated Entertainment Zone, an area near Vladivostok that has been earmarked for casino development.
Melco International Development, the Macau casino operator controlled by Ho, plans to acquire a five per cent stake in the Russian company, which is called Oriental Regent. Ho has also been appointed chairman of Summit and owns 37 per cent of the company.
Since 2007, gambling has been banned across Russia except in four specific zones: Azov (Krasnodar), Yantarnaya (Kaliningrad), Siberian Coin (Altai) and Primorye (Far East). Industry analysts regard Primorye as the most promising location, with about 400 million people living within one hour’s flight from Vladivostok.
With its proximity to South Korea, Japan and China, the Primorye gambling zone seeks to capture gamblers from this rapidly growing market and position itself in the region as a new “Pacific Vegas”. A US-based research firm, Gaming Market Advisors, has estimated that a total of US$5.2bn (RUB151.8bn) gaming revenue will be generated from this casino zone by 2022.
Read the full article in the August issue of InterGaming.
