Macau casino mogul to boost investment in Russian gambling zone

Melco International Development, a Hong Kong-based company owned by the Macanese gambling mogul Lawrence Ho, has completed a study of the proposed construction sites for a casino in Russia's Primorye (Maritime) Territory, and is now prepared to invest in the project. Ho's other company, Summit Ascent Holdings, has previously signed a casino investment agreement with the Primorye Territory administration.

Melco International Development is prepared to invest in a casino project in Russia's Far East, the press service of the regional administration reports, quoting the Hong Kong company's representatives. Melco has studied the proposed construction sites at Muravyinaya Bay near Vladivostok.

A preliminary investment agreement may be signed at the Far Eastern Investment Congress, to be held in Vladivostok on 6 and 7 September, the press service reports.

Ho's other company, Summit Ascent Holdings Ltd, signed an agreement with the regional administration in early July to invest in the planned Primorye integrated entertainment zone.

The sides are currently in talks over the size of these investments.

Lawrence Ho is the eldest son of the Hong Kong and Macanese gambling magnate Stanley Ho, who used to single-handedly control the gaming market of Macau for 40 years. Macau is China's only territory where gambling is permitted. Lawrence Ho entered the gaming business in 2003, after foreigners were allowed to do business in Macau, which put an end to his father's gaming monopoly.

Melco International Development is co-owned by Lawrence Ho, his wife and father. The company controls more than a third of the casino operator Melco Crown Entertainment. It also holds shares in the lottery operator MelcoLot, the ski resort managing company Melco China Resorts, the Jumbo Kingdom floating restaurant, and in the US-based gaming equipment provider Entertainment Gaming Asia.

Melco Crown Entertainment manages the Altira Macau complex, which includes 255 gaming tables, 95 electronic gaming machines, a 215-room luxury hotel, restaurants, bars, and associated infrastructure. Melco also manages eight Macau-based gaming machine operators united under the Mocha Clubs brand.

Ho's projects abroad primarily target Chinese clientele. The Wall Street Journal (WSJ) has previously highlighted Vladivostok's advantageous geographic location as a Far Eastern gaming centre.

According to industry experts, Primorye Territory should develop its infrastructure in order to attract residents of the Melco calibre to its future gaming zone. Pavel Grachev, general director of the Far East and Baikal Region Development Fund, says the project to build the necessary infrastructure for the gaming zone (including roads, power and water supply, and sewerage) may cost 7.7 billion roubles ($236 million) and take three to four years to complete.

The primary objective of setting up a gaming zone in Primorye Territory is to attract tourists, mainly those from the Asia-Pacific region. According to Grachev, more than 310 million people (in northern China, Japan and South Korea, where casinos are banned) live within a three-hour flight of the future Vladivostok gaming zone.

The Primorye zone is expected to be initially bringing $1.2 billion a year in revenue, and to reach $5.2 billion after the first five years of operation, WSJ reports. Gaming companies are sure to appreciate the low tax at Primorye which, according to Gaming Market Advisors, will stand at 3 to 7 per cent, compared to the 39 per cent levied in Macau.