Cambodia’s NagaCorp bets US$350m on Russian resort

HONG KONG: Hong Kong-listed NagaCorp Ltd (founder, Malaysian billionaire Tan Sri Dr Chen Lip Keong became the second industry player to take a punt on a Russian entertainment zone not far from Beijing, agreeing to invest US$350 million (RM1.2 billion) to build a casino, hotel and exhibition venue.

NagaCorp, which operates a casino resort in Cambodia and holds the sole licence to run casinos there, saw its shares shoot 5% higher after the announcement.

Macau magnate Lawrence Ho also said in July he will invest US$130 million in a casino complex in Russia’s Primorsky Territory, situated near the port city of Vladivostok and which is a 2½ hour flight from Beijing.

He will make the investments through companies Melco International Development Ltd and Summit Ascent Holdings Ltd 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 like 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, 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 one- to two-year period of approval processes and a four-year construction period. NagaCorp said the complex will have 100 gaming tables, 500 electronic machines, a large theatre  seating 2,000 and karaoke and spas. — Reuters


This article first appeared in The Edge Financial Daily, on September 10, 2013.