The political crisis between the West and Russia over Ukraine is unlikely to have any negative impact on Cambodian casino operator NagaCorp Ltd’s aspiration for a gaming resort in the Russian Far East, Tim McNally (pictured), the company’s chairman, told GGRAsia.
“It [an external crisis] always creates a concern, but by the same token, we are a few years out. It’s realistically likely to be 2018 but we’re still at the early stages. We’re staying with it, and we still see it as a good opportunity,” he told us.
So far Western sanctions over Russia’s annexation of Crimea have included targeting the assets and banking activity of senior members of the Russian government. That has raised the possibility of retaliatory action by Russia that might have an impact on unrelated cross-border cash transfers. Such transfers are a standard feature of modern casino gaming.
“Events around the world are never easy and they can have an impact, so you have to watch, monitor and obviously make some judgements along the way. But it hasn’t reversed our decision by any means,” added Mr McNally, referring to the Russian project.
NagaCorp announced in September it was planning to invest US$350 million (HK$2.80 billion) to build a casino, hotel and exhibition venue in the Russian province of Primorsky Krai, which shares a border with China and North Korea, and is accessible by air from Beijing in under three hours.
NagaCorp, which is aiming to fund the project using equity and or debt, said the complex would 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.
From April 1999 until October 2005, Mr McNally was the executive director of security and corporate legal services for the Hong Kong Jockey Club.
Prior to his move to Hong Kong, Mr McNally was a special agent of the Federal Bureau of Investigation in the United States for more than 20 years.
In late April it was reported that Macau casino developer Lawrence Ho Yau Lung planned to raise his own stake in a Russian casino project neighbouring NagaCorp’s proposed site. That was after a consortium backed by Mr Ho acquired more shares.
It was said Mr Ho’s Russian partner, Oleg Drozdov, would sell part of his 30 percent stake in that project to Summit Ascent Holdings Ltd and Firich Enterprises Co. Once the deal is sealed, Summit Ascent’s stake in the overall project will increase to 50 percent from the current 46 percent. Mr Ho owns 33.8 percent of Summit Ascent.
A November filing by Mr Ho said Mr Drozdov was detained by Russian authorities over alleged “business malpractices” tied to the construction of a solid waste treatment facility. While Mr Ho says the investigation wasn’t linked to the casino plans, the filing states that the company has the right to buy out any shareholder “deemed by any relevant gaming regulatory authority to be an unsuitable associate.”
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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