Russian President Vladimir Putin’s plan to develop the Crimea as an international casino destination is being met with skepticism in the gaming industry.
It’s an about-face for Putin, who shut down the country’s flourishing casinos in 2009 as a plague on society—a “dangerous addiction and a magnet for organized crime” was how he put it—and exiled it to four outlying areas far from the country’s major metropolitan centers.
He now sees the industry as a tool for rejuvenating the ailing economy of the Black Sea region, which he forcibly annexed from the Ukraine in April and is dependent on hefty subsidies from Russia.
Andrew Gellatly, who heads London-based news and research firm GamblingCompliance.com, told Bloomberg News the plan will fail. Russian high rollers favor more luxurious destinations such as London or Monaco, he said. A former Soviet republic doesn’t fit the bill. Also, infrastructure connecting Crimea to the Russian mainland is lacking.
Steve Gallaway, a partner with U.S.-based Global Market Advisors, likewise told The Wall Street Journal the Crimea “has no value” as a casino destination. “Russians don’t go there on vacation.”
The four zones established in 2009—in the East European enclave of Kaliningrad, in the Don-Rostov region near the Black Sea, in Altai in Central Asia and Primorye in the Far East—similarly have generated little interest, although the Primorye region near the Pacific port city of Vladivostok is slated to host at least one major casino targeting its proximity to the large gambling populations of northern China and Korea.
Vladivostok is only two and a half hours from Beijing by air, and Global Market Advisors estimates the market could be worth $1 billion in annual gaming revenue.
It’s a view apparently shared by Macau casino magnate Lawrence Ho, who is leading a consortium of investors in developing the casino there in partnership with a Russian businessman currently in prison in connection with a corruption investigation. Ho’s plans call for a US$360 million casino with 120 hotel rooms, 65 table games and 800 slot machines in its first phase.
Cambodia’s Hong Kong-listed NagaCorp also has outlined plans for a casino in Primorye, and Global Gaming Asset Management, a company headed by former Las Vegas Sands President William Weidner, has held talks regarding Vladivostok with a government-run development group.
