Hong Kong-listed NagaCorp became the second industry player to take a punt on a Russia entertainment zone, agreeing to invest USD$350 million to build a casino, hotel and exhibition venue.
NagaCorp, which operates a casino resort in Cambodia and holds the sole license to run casinos there, saw its shares shoot 5 percent higher after the announcement, compared with a 1 percent rise for other casino players and the Hang Seng Index.
Macau magnate Lawrence Ho also said in July he will invest USD$130 million in a casino complex in Russia's Primorsky Territory, situated near the port city of Vladivostok, which is a 2-1/2 hour flight from Beijing.
He will make the investments through companies Melco International Development and Summit Ascent Holdings and not through his main casino company Melco Crown Entertainment, which he co-owns with Australian billionaire James Packer.
Encouraged by the success of Macau and Singapore, casino operators around Asia are eager to expand. The Philippines is building a large scale entertainment zone in Manila, while Vietnam, Japan and Taiwan are also looking at casino resorts as a way to boost tourism.
Vladivostok, better known for its oil and gas pipelines, is trying to lure investors with a very low gambling tax compared to established markets such as Macau.
Situated in close proximity to the borders of the Jilin, Heilongjiang and Liaoning provinces in China, the entertainment zone is one of four legal casino zones established in Russia after a nationwide embargo on casinos was imposed in 2009.
Ho hopes his resort, which is expected to open in September 2014, will draw gamblers from Northeast China, South Korea and Japan. NagaCorp says its resort is unlikely to open before 2018 due to a 1-2 year period for approval processes and a four year construction period.
NagaCorp, which is aiming to fund the project using equity and/or debt, said the complex will have 100 gaming tables, 500 electronic machines, a large theatre facility to accommodate 2,000 people as well as entertainment offerings such as karaoke and spas.
Hotel suite homes will be part of the resort that aims to accommodate some 20,000 people. The company is working with government officials to permit foreign purchasers of the apartment suites obtain visas.