GGRAsia – Primorsky tax on casinos to be unchanged: vice-governor

Primorsky tax on casinos to be unchanged: vice-governor

Mar 05, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck

The local government in Primorsky Krai in the Russian Far East is to keep the tax burden on local casino resorts unchanged, at RUB125,000 (US$2,198) per month for each gaming table, and RUB7,500 per month for each slot machine.

“In order to provide stable business conditions, the regional administration suggested not to increase these rates,” said Tatyana Kazantseva, the region’s vice-governor responsible for economic and financial matters, in a press release issued by the Primorsky Krai Development Corp. The announcement followed discussion of the region’s budget on February 28, at the regular meeting of the local legislative assembly.

Primorsky Krai Development is a government-owned company overseeing the Primorye Integrated Entertainment Zone, a casino development area located 50 kilometres (31 miles) from Russia’s Pacific port of Vladivostok.

Last year it was reported that the Russian federal authorities were to allow – via new legislation – those Russian special economic zones entitled to host casinos, to up the levies payable by operators. The monthly payable levy per gaming table was to range between a minimum of RUB50,000 and a maximum of RUB250,000, and the levy for gaming machines was to range between RUB3,000 and RUB15,000.

A note in late November from brokerage Union Gaming Securities Asia Ltd said application of such new upper limits could reduce the 2018 earnings before interest, taxation, depreciation and amortisation of the only casino firm currently with an operation hosted by the Primorksy government – Summit Ascent Holdings Ltd, via its Tigre de Cristal resort (pictured) – by as much as 6 percent.

Ms Kazantseva was quoted saying in the press release updating the position of Primorsky Krai on the topic, that so far businesses in the Primorye Integrated Entertainment Zone had created 1,000 direct jobs and approximately 4,000 jobs in related fields, with the amount of taxes paid from the gambling zone amounting to approximately RUB322 million a year.

The release noted that two other gaming projects – one from Diamond Fortune Holdings Ltd for a casino resort called “Selena” and the other from Hong Kong-listed NagaCorp Ltd, the latter referred to as Naga Vladivostok and involving a water park, were in the “active phase of construction”.

The release added: “The opening of new facilities is scheduled for 2019.” Tigre de Cristal opened in 2015.

Agreed schedule

The document said that in January, Primorsky Krai’s governor, Andrei Tarasenko, met investors and stressed they should “take into account that the development of the entertainment zone should be in accordance with the approved plans and schedules, as the construction of new hotel-casino complexes in the resort is a contribution as to the economy of the region in general and new jobs for the inhabitants of Primorye as well as a profit for the investors itself”.

In September, a Primorsky Krai Development spokesperson told GGRAsia that a move to auction land for a further casino scheme had been suspended, as interested parties “were not ready”.

The latest release stated that Primorsky Krai had decided to raise – to “maximum values offered by the tax code” – taxes payable by what it termed “processing centres of bookmaker offices and processing centers of sweepstakes”.

Ms Kazantseva was cited as saying there were 59 betting shops in the region, and monthly taxes on them would be doubled from RUB7,000 to RUB14,000.

In late December it had been announced that Asian casino investor Lawrence Ho Yau Lung had stepped down as chairman and non-executive director of Summit Ascent. The move followed Mr Ho’s decision earlier that month to sell off his 17.4-percent stake in the firm. The reason for that sell-off decision was not given at the time.