Construction of a Russian casino resort majority-owned by Lawrence Ho Yau Lung’s firm Summit Ascent Holdings Ltd is “nearing completion”, the company said in a filing on Wednesday.
The project – part of what the local authorities call the Integrated Entertainment Zone of the Primorye Region, near Vladivostok in the Russian Far East – had been due to open this month, according to a separate filing by Summit Ascent on September 16 last year. But some media sources reported earlier this month that the opening had been postponed to mid-July.
Melco International Development Ltd – a firm also controlled by Mr Ho (pictured) and which is a partner with Australia’s Crown Resorts Ltd in Macau and Philippines casinos via Melco Crown Entertainment Ltd – is a minority investor in the Russian scheme.
Previous filings from Summit Ascent said the Russian casino complex is expected to have 119 hotel rooms, 800 slot machines, 25 VIP gaming tables, 15 mass-market baccarat tables and 25 mass-market tables providing other table games.
Summit Ascent says the development is within a three-hour flight radius of what it calls the “target feeder markets” of Heilongjiang, Jilin and Liaoning provinces in northeastern China, as well as South Korea and Japan.
Summit Ascent added in its annual report filed on Wednesday that the project “carries a very favourable tax environment for gaming activity compared to other jurisdictions, and is expected to be the first and only legitimate casino operating in the Far Eastern region of the Russian Federation for next few years. For these reasons, the group remains optimistic and moreover sought to acquire an additional 14 percent equity interest in the project in 2014.”
Hong Kong-listed Summit Ascent used to focus on trading ceramic tiles before it got into the casino business.
In September 2013, Mr Ho pledged to invest US$700 million in the Primorye project, signing a deal with the Russian authorities.
In July last year, Summit Ascent’s equity interest in the Russian complex was increased from 46 percent to 60 percent. At the same time all of the investors – including Summit Ascent and Melco International Development – pledged an additional US$137.7 million to the scheme.
Mr Ho said in a statement on Wednesday to Summit Ascent shareholders that the “challenges experienced” recently in the Macau market – where gross gaming revenue fell 37 percent year-on-year in the first quarter – “presented us with opportunities and we remain optimistic about the prospects of the company’s gaming and resort development in the Russian Federation Far East, which has so far attracted more international investment than the country’s other gaming zones.”
He added: “Sino-Russia political relations have continued to improve, and the two countries have grown increasingly economically interdependent.”
NagaCorp Ltd, a Hong Kong-listed firm that operates a casino resort in Phnom Penh, Cambodia, is also investing in Primorye. In November it said it might seek to have a public offering for its Russia venture, which it described as a US$369-million project.
NagaCorp said in its 2014 annual results issued in February, that its Primorye casino hotel scheme would “commence operation not later than 2018”.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal