Ho Casino Empire Betting on Red in Vladivostock
Posted on: August 30, 2013, 05:30h.
Last updated on: October 22, 2013, 02:02h.
There is no doubt that billionaire Chinese casino mogul Stanley Ho’s empire is a force to reckon with on the international platform, and news of further investment into the Russian casino business has added even more strength to the Ho name.
Ho Stakes His Claim on Russia
Melco International Development and Summit Ascent, both companies controlled by Ho’s son, Lawrence Ho Yau-lung, have fronted up enough of an investment for a 51 percent holding of a casino resort in Russia, bringing the developing casino’s total investment budget to one billion Hong Kong dollars (around $130 million).
The financing goes straight into Hong Kong-based firm Oriental Regent, owners of the casino resort, which sits on a 90,455 square meter plot in Primorye in Russia, where the project is currently under construction and is expected to be up and running by September 2014.
When finished, the casino resort will consist of 119 hotel rooms, 800 slots machines, 40 public gaming tables, and 25 VIP gaming tables.
“The casino resort has the advantage of being geographically close to the target feeder markets, the three Chinese provinces in northeastern China, namely Heilongjiang, Jilin and Liaoning,” explained a Summit Ascent spokesperson.
Russia as Gateway to Chinese Gamblers
It is Lawrence Ho Yau-lung’s hope that setting up shop in Primorye’s capital city of Vladivostock will enable the Ho empire to tap into the northern Chinese gambling market.
“Russia offers a favorable tax environment for gaming business compared to other jurisdictions,” added the company rep; Summit Ascent invests primarily in property and also supplies building equipment. “The investment will give the company a first mover advantage as the proposed casino resort will most likely be the first legal casino to start operating in the Far Eastern Region of Russia.”
Summit Ascent is fronting investment for 46 percent of the casino set to open up on Russia’s Pacific coast, while Melco International Development will take a five percent interest in the company, totalling 51 percent between the two Lawrence Ho Yau-lung-owned operations. Between the two firms, the investment has reached close to the $65 million mark.
The new investment deal will see the casino pay three percent of its gross gaming revenue to Summit Ascent, the larger shareholders, and 0.3 per cent of the gross gaming revenue will be paid to Melco International Development as a consulting fee.
Thirty percent of the remaining shares of the development will go to Russian businessman Oleg Drozdov, an investor in the construction business in the area, and 19 percent of the development will be owned by Taiwan firm Firich Enterprises.
At the beginning of the month, Drozdov had acquired the larger share of 49.99 percent of the project from another Russian businessman, named Aleksey Simanchuk. However, about three weeks later, Summit Ascent received a letter from someone claiming to be Simanchuk’s wife, who stated that divorce proceedings between the pair had not authorized the sale of the shares, and therefore the transfer to Drozdov was illegal.
In response, Summit Ascent has stated that “there is no valid legal basis for any claim of those matters which could adversely affect the transaction.” With any luck, it will just be an attempt to drag the deal into what appears to be a somewhat messy divorce for the Russian businessman.
Ho should understand that, having had four wives himself. Some things are universal.
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