TOURISM >Russian casino zone to woo Asian money

MACAU - Reuters

Russia is betting on a gambling and entertainment zone near its 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 square kilometer 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.

“We have no north Asia port for gambling. For a long time the debate has been, will it be Korea or Japan and all of a sudden Russia is in play. It’s an interesting opportunity,” said Bo Bernhard, executive director of the International Gaming Institute at the University of Nevada.

He said the key for investors was how many competitors the Russian government would allow.
 
“This isn’t a furniture store. Gaming is a rare product and needs explicit government approval to operate,” he added.
 
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.

May/24/2012

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