More casinos to come
Russian authorities in the Primorye Integrated Entertainment Zone say tax revenues from the special economic development area will reach RUB165 million (US$2.5 million) this year, RUB700 million a year by 2019, and RUB2.5 billion by 2022.
The figures were cited by Primorye Vice Governor Sergey Nekhaev and quoted by GGRAsia. The statement did not clarify if Nekhaev was referring to gaming tax revenue or overall tax revenue.
Primorye is located near the port city of Vladivostok in the Russian Far East. The sole casino now open there is Tigre de Cristal, majority owned by Hong Kong-listed Summit Ascent Holdings Ltd., a firm controlled by Lawrence Ho. The property opened last October with a 121-room hotel and a gaming floor with 321 slot machines, 33 mass tables and 35 VIP tables.
Union Gaming Securities Asia Ltd. has described the jurisdiction as very attractive for casino operators, with no tax on gross gaming revenue, but a fixed monthly tax of RUB125,000 per gaming table and RUB7,500 per slot machine.
Recent news reports say the government could be considering changes to that lenient tax system, but the management at Tigre de Cristal expressed confidence that Russia will not retreat from its policy of encouraging regional investment through integrated entertainment zones.
“It is necessary to attract well-known operators, who will be able, together with the government, to create the infrastructure… and then to manage it effectively. A good example is the casinos,” said Roman Skoriy, deputy head of Russia’s federal tourism agency. He also noted the importance of casinos in generating “stable” tax revenue for the regional government.
In 2009, the Russian government closed down all casinos and electronic casino game halls in the country. The following year, it identified four specific casino gaming zones nationwide: Primorye; Azov City in the Krasnodar region; Kaliningrad on the Baltic Sea; and Altai in Siberia. In 2014, Russia’s President Vladimir Putin signed a law allowing the establishment of additional gaming zones also in Sochi and in the Crimea.
Among the investors now at work in Primorye is Hong Kong-listed NagaCorp Ltd., which broke ground on a casino resort in early 2015. The property is scheduled to open in the third quarter of 2018. Two Russian groups also are investing in casino projects in Primorye: Royal Time LLC, which plans to invest at least US$215 million in its “Phoenix” resort, which is expected to open in late 2017; and Diamond Fortune Holdings Ltd., which plans to develop four casino resorts in the zone, with the first to open in 2018. Its investment will total US$914 million and make Diamond Fortune the dominant presence in Primorye.
