Primorye is discussing casino game rules with the Chinese

For the first time foreign investor became interested in Russian gambling business. This year one of the largest companies in the entertainment market Summit Ascent Holdings may begin construction of its own casino on the territory of resort zone "Primorye".

Negotiations with the authorities of the region are in full swing, now the parties are discussing a specific amount of investment in the project. It is assumed that the company will act as an investor in the construction of one of the entertaining complexes. According to preliminary data, project will be implemented in three stages, the first will be completed in 2016, the next – in 2019 and the final stage - in 2022.

If the contract with Summit Ascent Holdings will be concluded, it will be not only be the first investment of foreign companies in the Russian gaming industry, but also the first really significant event in the industry in general for the last few years. According to the law limiting gambling, adopted in 2006 and acting since July 1, 2009, casinos can operate only in four special gambling zones: in the Krasnodar Territory ("Azov-City"), in the Altai Territory ("Siberian Coin") , in Kaliningrad region ("Yantarnaya") and in the Primorey Territory ("Primorey"). However, none of them has ever been able to become a "Russian Vegas", there are just a few casinos working on their territory.

"Gambling zone in Primorye is most promising because about 400 million people live at the distance of one-hour flight from Vladivostok," agrees Primorey Territory Governor Vladimir Miklushevsky, thus hinting at the proximity of neighboring China and Korea.

The integrated resort zone "Primorye" is located in Muravyinaya (Tavaiza) Bay. Zone area is 619 hectares. In addition to entertainment centers and casinos, they plan to build 4 five-star hotels, 7 four-star hotels and 4 three-star hotels, 12 guest villas, yacht club, multifunctional shopping and exhibition center and other facilities on this territory. Total amount of investments in these projects is estimated at 1.763 billion dollars.

It is the proximity to Asian countries that generates interest of Summit Ascent Holdings. Today flight from Beijing to Vladivostok takes only 2.5 hours, while flight to "Chinese Las Vegas" - Macau – takes almost 4 hours. The road from Harbin to Vladivostok is even closer and takes only1.5 hours.

"Many field-oriented investors so far have not realized that Vladivostok is the best "window" to the Asian gaming market", The Wall Street Journal quotes Dean Macomber, president of consulting company Macomber International.

Summit Ascent Holdings has long been a monopolist in the gaming market not only in Macau, but in fact in the entire China. The fact is that for a few years Macau was the only area of ​​the Celestial Empire, where gambling was officially authorized, and players from all over the country were coming here to try their luck. However, a few years ago other companies acquired the right to open their casinos in Macau. The competition did good to the market and last year the total revenue of the casinos in Macau reached $ 38 billion. It's more than casino revenue in Las Vegas.

At the same time neighboring countries started to develop their gaming projects: Vietnam, Nepal, South Korea and Myanmar. In the last few years all of these countries inspired by Macao success have eased the legislation governing gambling entertainment.

Under this circumstances management of Summit Ascent Holdings is looking for growth opportunities in other markets. The company is currently building a gaming center in the Philippines. And it is also assumed that its main visitors will be Chinese tourists.

At this experts interviewed by The Wall Street Journal believe that low level of development of Primorye gambling zone may be advantageous for Summit Ascent Holdings. Lack of competition and low barriers of entry allow Summit Ascent Holdings to save on investments in the project, which will be amounting to hundreds of millions of dollars. For comparison, investment volume in new casinos in Macau are amounted in billions of dollars. Another advantage of Primorye, compared with other regions for this project – is the low rate of income tax. According to Gaming Market Advisors, the income tax will not exceed 7% versus 39% in Macau.

It is quite real to reach such volumes, especially if other casino operators will follow Summit Ascent Holdings’ example. Earlier Primorye administration stated that, in addition to China, they hold negotiations with investors from four more countries - the U.S., Malaysia, Hong Kong and from Russia.

https://pda.bfm.ru/articles/221155