GGRAsia – Summit, NagaCorp confirm fed-level meetings on Primorye

Summit, NagaCorp confirm fed-level meetings on Primorye

Jul 12, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck

Two Asian firms separately investing in a special casino zone in the Russian Far East – namely Summit Ascent Holdings Ltd and NagaCorp Ltd – have confirmed to GGRAsia they recently held meetings about their projects with high-level Russian federal officials.

It had been reported by several Russian media outlets that the Russian central authorities had in effect taken over from the Primorsky Krai regional government the oversight of the Primorye Integrated Entertainment Zone (IEZ) near Vladivostok, amid concerns that progress on the special area was lagging.

But investors have also been seeking clarity on a number of issues, including what official action might be taken against some unlicensed gaming said to operate out of nearby Vladivostok, possible simplification of some cumbersome currency exchange procedures, and whether the tax burden on operators might change.

Brokerage Union Gaming Securities Asia Ltd said in a July 7 note that one investor, Royal Time LLC, “recently had its licence pulled due to delays”. A fourth investor, Diamond Fortune Holdings Ltd, reportedly began recently ground preparation for its first casino resort in the Primorye IEZ.

The only company that has so far built a casino in the zone is Hong Kong-listed Summit Ascent. It opened phase one of its Tigre de Cristal resort in autumn 2015.

Company executives recently met Russian Deputy Prime Minister Yury Trutnev in Macau, a Summit Ascent spokesman confirmed to GGRAsia. The spokesman described Mr Trutnev as President Vladimir Putin’s plenipotentiary in the Russian Far East.

Summit Ascent’s chairman, gaming entrepreneur Lawrence Ho Yau Lung, was not present at the recent meeting, due to travel commitments. But John Wang, deputy chairman, and Craig Ballantyne, chief operating officer of Russian operations – and also COO of the entity that holds Tigre de Cristal’s licence – discussed with Mr Trutnev topics including work on phase two of the resort; the possibility of simplifying the existing procedures for exchanging foreign currency at the property for gambling purposes; and the possibility of a government crackdown on underground casinos said to operate in the Vladivostok area.

Tigre de Cristal’s US$500-million phase two will have an aggregate of 500 extra rooms in two hotels, duty free shopping, a food court and extra gaming space.

The Summit Ascent spokesman told GGRAsia that the firm was currently projecting that “Phase 2a”, including a first tranche of 300 hotel rooms, and half the new gaming space, would open in the second half of 2019.

NagaCorp committed

Tim McNally, chairman of another Primorye investor, Hong Kong-listed Cambodian casino operator NagaCorp, told GGRAsia that it had held meetings with Russian federal deputy ministers regarding its project.

NagaCorp had a ground breaking ceremony on its Primorye site in May 2015. Piling work is due to start this month, said Mr McNally.

“At this point in time we are still anticipating [operational] launch in the first half of 2019,” he stated. “We did have some delay because of an archaeological dig after some artefacts were found on our site,” he added.

That had set back the project by “at least six months” at the turn of this year, noted the chairman, adding that by the spring the firm had received the go ahead to proceed with work on the site.

“We have had a series of meetings over the last few months. We had the federal government – combined with the Primorsky government – make their decisions regarding other licence holders. And they asked us about our progress. But the bottom line is that we are moving forward on the project,” said Mr McNally.

“We had very productive and positive talks with the federal [government] people, including the deputy ministers responsible for [Russian] Far East development,” he added.

Asked by GGRAsia whether there was ever an issue of NagaCorp losing its Primorye licence, Mr McNally said: “There is no such jeopardy, there is no such risk.”

Asked about the budget for Primorye, Mr McNally told us: “In our original agreement back in the fall [autumn] of 2013, we committed to a US$350 million project. Over the course of our development we are going probably to far exceed that.”