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Fishing for chips in Pacific's 'new Macau'

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16 August 2012


Primorye Game Zone, Russian Far East

Scheme of Primorye gambling zone, with casino areas marked brown

A new drive is underway to get the roulette wheels spinning in a bid to bring some Macau magic to Siberia's Pacific coast. The aim is to lure tourists from Japan, China and Korea amid evidence that the Asia casino sector remains strong despite a slowdown in economic growth. 

The Primorsky region in the Russian Far East maybe better known for the tradtional fishing industry, but as Nevada gambling expert Howard Stutz quipped: 'they are now 'fishing for chips!' 

The aim is to develop 'the next Macau' starting with a  dozen casinos in phase one, to be completed by 2016 and a planned total investment of about $2 billion.

This will be part of an upscale tourist zone in  Muravyinaya Bay with four and five star hotels, a yacht club, a ski resort, golf courses, shopping malls, and conference facilities. Eventually there will be five large resorts. 

Vladivostok is hosting the Asia-Pacific Economic Cooperation summit in September, giving a new international focus on the 'San Francisco of Russia' which has recently undergone a massive facelift and is anxious to throw off its Cold War 'closed city' label.
Russky Island, Vladivostok

A new bridge to Russky Island, built ahead of APEC forum and opened recently in Vladivostok 

This is one of only four places in Russia where gambling will be permitted following a crackdown on the wild gaming scene that developed in the 1990s after the fall of the USSR.

Another is in the picturesque foothills of the Altai Mountains in Siberia.

'It is a pity that casinos and slot machines are as addictive as alcohol in this country,' said President Vladimir Putin, as measures were taken to control and limit gambling. 

'We envision that in the future the integrated entertainment zone will be closer to that of Las Vegas than to the stricter controls that we see in Singapore,' said Marina Lomakina, general director of state-owned developer Nash Dom Primorye, which has invited gambling titans to submit their 'concepts' for how the complex should be developed.

'While casino gaming is legal in the zone, we are looking for concepts that focus on tourism development. Every effort is being made to ensure that global investors are confident in the business environment of Primorye. '

She stressed the aim to 'capitalise upon Vladivostok's strong linkages with Asia'. Crucially, Vladivostok is roughly two hours flight from Tokyo and Seoul, and two and a half hours from Beijing.

The Russian authorities want to 'create a compelling experience for Asian tourists seeking a destination that is near, but culturally different', she said.   

'We hope most of the customers will be from China, as well as Korea, Japan and the United States. We have very strong ties with these countries, and expect to have their interest.'

The plan is to attract gambling industry giants and it was recently announced that as well as favourable lease terms there will be virtually zero taxes on gross casino revenues in return for creating employment and developing a tourist industry.

This compares with a 39% tax on gross gambling revenue in Macau, 15% in Singapore's casino zone, and 6.75% in Navada. 

Primorye Game Zone

Muravyinaya Bay near Vladivostok, territory of Primorye Gambling zone 

Russia will mirror the best world standards from the US and Asia in selecting casino operators and money laundering and illegal money lending similar to those of Las Vegas, Macau and Singapore.

Nash Dom Primorye is being advised by Las Vegas based  gaming industry consultant Jonathan Galaviz.

Initial international reaction was positive to the latest incentives for the plan. 

'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.

'Up to this point, we haven't heard of much interest in the region from international operators,' said a research report by Union Gaming Group Managing Director Bill Lerner. 'That said, the region seems to be gaming-friendly from a development standpoint, and we expect operators to give it a look given the low tax rate and proximity to Asia.'

He added: 'The hope for the region is to draw customers to from Asia, though Russian citizens will not be restricted from gaming. The government is leaning toward a model similar to Singapore, though there will be no restrictions on gaming versus non-gaming space.'

One concern is that the bureaucracy over visa applications could put off visitors, but currently there are exemptions for Chinese citizens in groups travelling for less than two weeks. Estimates suggest revenue from the development could be between $2 billion and $7 billion once it is complete. Macau last year collected $33.5 billion from gamblers.

'I want the Primorsky integrated entertainment zone to become a national-scale project,' said Primorsky governor Vladimir Miklushevsky.

The deadline for submitting proposals is 21 September with the authorities aiming to start discussions with potential investors by the end of October.

A recent report by concluded that Asia's casino sector continues to perform well despite a background of economic slowdown.  

'Far from being an industry reaching its peak, Asia's casino sector still has significant growth potential,' said the report. 

The Vladivostok development was seen as having 'considerable potential to become successful, major casino destinations'.

Russia faces competition from new developments in the Philippines and Vietnam, and Taiwan's Matsu island group has voted  to allow casino resorts.

Comments (1)

what a bridge... dont care about the gambling, but to spend some time with the camera, taking pictures of bridges and bays would be so nice
Z, Prague
17/08/2012 01:54

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