Russia develops casino zone in Vladivostok to attract wealthy Asians
Russia is betting on a gambling and entertainment zone near its far eastern port city of Vladivostok to lure investors who have spent big bucks on casinos that cater to Asian gamblers in the likes of Macau and Singapore, in particular cashed-up Chinese.
Vladivostok, just 2-1/2 hours by plane from Beijing and known more for its oil and gas pipelines, will face competition from Asian countries such as Vietnam and the Philippines, which are setting up similar tourism and entertainment zones.
Russia’s state-owned Nash Dom Primorye said at the Global Gaming Expo in Macau on Wednesday it is seeking private investors and/or companies to build casino resorts in a six sq km (2.3 sq mile) area in Vladivostok. One of four official Russian government zones where casino gambling is legal, Vladivostok is the only one that has formally initiated plans to lure foreign investors.
Known as the Integrated Entertainment Zone, the project has space for roughly five large resorts. A report from Gaming Market Advisors, which conducts casino market research, estimates the zone could rake in revenues of $2 to $7 billion annually when completed. By comparison, Singapore’s casino area which is similar in size, took in more than $5 billion in 2011.
Nash Dom Primorye has appointed Las Vegas-based Galaviz & Co as lead strategic adviser for the tender. The tender will be initiated in June, giving potential international operators 60 days to send in a pitch and budget estimates. The government will then enter into discussions with potential investors by the end of October.
Marina Lomakina, general director of Nash Dom, told Reuters she hoped the zone would be fully completed within five years. “We want companies who are well known and will help create amenities that are more than just casino gaming,” she said, adding that the zone would require a total minimum investment of $2 billion from private investors looking to develop properties.
The plan includes luxury hotels, a yacht club, shopping malls as well as outdoor sports such as golf. The zone is 2.6 sq km, but can be extended to 6 sq km. The project, which will focus on attracting Asian money, comes when China’s economy is slowing and Macau’s once turbo-charged monthly growth rate is falling to near single digits.
Russians would also contribute to the total revenue spent in the Vladivostok zone, Lomakina said. Unlike Asian countries such as Vietnam where it is illegal for citizens to gamble, Russians are allowed to gamble in designated local zones.
Vladivostok, which has been undergoing a facelift ahead of hosting the APEC summit in September, is two hours by plane from Seoul and Tokyo