For Russia’s Primorye gambling zone, easy ways for gamblers to come in and out of area are crucial to the success of the gaming hub, which is located outside of Vladivostok. With Chinese players a key demographic, the announcement this week of Cambodian casino group NagaCorp’s $12 billion, 235-mile high-speed railway linking Primorye to the northeastern Chinese city of Mudanjiang was welcome news indeed.

NagaCorp Naga Vladivostok

NagaCorp’s Naga Vladivostok will be the largest development in the Primoyre casino zone, but it has been slow to get off the ground, to the frustration of the Russian government. (Image: NagaCorp)

The company has previously been accused by Russian officials of dragging its feet on the development of its Naga Vladivostok casino resort in the area.

According to reports by Russian media service RBC and subsequently confirmed by the operator, NagaCorp has enlisted the help of Chinese rail company Dongfang Group on the project.

NagaCorp has helped to bring in China Railway Dongfang Group because it needs to attract a massive tourist flow, primarily from China, to successfully develop its business. And it encouraged the Chinese investor to carry out this project,” a source told RBC.

NagaCorp refused to comment on the specifics of the project “until an active phase of the work in this direction starts,” but confirmed that the agreement had been signed in April and a feasibility study was underway.

It’s unclear whether the Russian government and fellow investors in Primorye may help to finance the project.

Russia’s Macau? 

Eager to attract foreign investments, the sanction-riddled Kremlin has authorized the construction of eight casinos in the special economic zone, one of four such zones where gambling is legal in Russia.

The idea is to create a new Macau in Russia’s Far East. The region shares a large border with China and is but a ferry ride away from Japan, but the government has become frustrated by the slow development of the zone, which offers some of the best tax breaks in the world for gaming operators.

So far, the only casino up and running is the Tigre de Crystal, currently Russia’s sole integrated resort. Built by Summit Ascent Holdings, whose majority investor was Macau casino kingpin Lawrence Ho, it opened its first phase in 2015. But Ho has since sold down his shares in the company, suggesting a lack of faith in Primorye’s ongoing success.

One reason could be geopolitical, considering the small border Primorye shares with North Korea. In April last year, regional media outlet primemedia.ru reported that Russian trains loaded with military equipment were heading to the region in response to the escalation of hostilities between the US and the Hermit Kingdom – not exactly a state of affairs that’s conducive to investment.

And US President Donald Trump’s cancelation of nuclear talks with Pyongyang on Thursday is unlikely to turn that  perception around.

Casino and Rail ‘On Track’

NagaCorp plans to build the biggest resort in the region, but the project has been delayed, apparently by extensive archaeological excavations, but it recently laid the foundations and claims to be “broadly on track” for 2019.

Another project — the Selena World Resort and Casino — which is led by a group of Russian and Asian investors, has also begun preliminary work.

Primorsky Krai Development, the government department charged with overseeing the proceedings,  recently launched three independent auctions for plots of land authorized for casino development, but has received no bidders.

Development has been painfully slow for Primorye, but the advent of two new resorts over the next few years and NagaCorp’s proposed investment in transport infrastructure should — eventually — be a game-changer.