Russia Casino Development Sites for Sale, Unclear If Any Companies Are Rushing In
Posted on: July 18, 2017, 04:00h.
Last updated on: July 18, 2017, 01:09h.
Three Russian casino land parcels reserved for gaming and hotel development are on the auction block near Vladivostok. The world’s largest country has been trying to transform the Far East port city into a bustling entertainment and gambling destination that attracts tourists and high rollers from China, South Korea, and Japan.
In 2009, Russia’s federal government authorized a gaming strip some 30 miles northeast of the city. The plans called for upwards of seven casinos in an effort to create an integrated entertainment destination.
But today, Vladivostok is home to just one casino, Tigre de Cristal.
According to GGRAsia, which first reported the Russia casino site auctions, one of the listings is land that was previously granted to a Russia-Chinese investment group back in 2015. However, the venture’s failure to develop the resort resulted in fines, and eventually, the forfeiture of the land.
The three lots total roughly 102.5 acres. Vladivostok is largest city in the Primorsky Krai province.
Russia remains confident in can create a mini Las Vegas or Macau north of the congested port city. President Vladimir Putin is strongly against gambling, but has allowed the creation of special gambling zones in regions in need of an economic boost.
Room to Grow
GGRAsia, which reviewed the auction listings, says the first lot is a 19.5-acre property that requires a $120 million investment. The property will be allotted to have at least 50 gaming tables and 300 slot machines.
The second lot is larger in size (34 acres). The parcel comes with a minimum investment of $210 million, and will be permitted at least 100 gaming tables and 500 slot machines.
The third lot is the biggest (nearly 49 acres), and the highest bidder will be required to spend $300 million on the project. It will receive the same number of tables and gaming terminals as the second lot.
Russia is taking bids on the three sites now through August 28.
The parcels are more than large enough to build a large resort. MGM National Harbor, a recently opened $1.4 billion property, sits on 23 acres outside Washington, DC. And still under construction, MGM Springfield takes up less than 15 acres.
The gambling landscape in Asia is about as volatile as many of the games found inside the casinos.
Macau’s industry remains unsettled, as China continues its crackdown on the flow of money to the special gaming enclave through VIP touring companies. The Philippines is in the process of selling its state-owned casinos to private enterprises, and South Korea is looking to expand its commercial gambling market to foreigners.
Then there’s the holy grail: Japan. Las Vegas Sands and MGM, to Asian-based conglomerates Galaxy and Melco, are expected to propose resorts costing as much as $10 billion should they receive one of the two gaming licenses.
Russia says Vladivostok, located near the northeast border of China, paired with its picturesque landscape, makes it a prime location for casinos and hotels. Primorsky says 400 million people live within a two-hour flight.
But the city’s climate might keep many would-be visitors away. The average high is under 50 degrees Fahrenheit six months out of the year.