The Summit Ascent Holdings, which is owned by Lawrence Ho, is finishing to built the first casino of the Primorye Integrated Entertainment Zone, which will be called Tigre de Cristal. The official opening ceremony will take place on August 28.
This is good news for the Russian gambling industry, which can hardly boast an abundance of such huge foreign investors. If Lawrence Ho succeeds, the Russian gambling zones will likely become interesting to other large gambling operators. At the moment, they are afraid of corruption and lack of certainty in relations of the country's authorities and gambling.
Who are You, Mr. Ho?
Lawrence Ho is the eldest son of the well-known gambling tycoon Stanley Ho. It is not surprising that he followed in his father’s footsteps. Having obtained a brilliant western education, Lawrence started his career in the unprofitable Melco International Development Limited as its Managing Director in 2001. The company started bringing profits in 2006, and Lawrence Ho became its Chief Executive Officer. The Melco International acquired one of the six gaming concessions in Macau and built its first casino hotel in Taipa, Macau, which is now called Altira Macau.
Then Lawrence Ho and James Parker (who was a son of the legendary Australian billionaire and high roller Kerry Packer) created a holding called Melco Crown Entertainment and built City of Dreams Casino in Macau. A new Lawrence’s casino called City of Dreams Manila was opened in Manila in winter of 2015.
Lawrence Ho lives up to its nickname (the Energizer Bunny). We can only envy his energy. He was selected as one of the Ten Outstanding Young Persons of Hong Kong in 2006. He was recognized as the Best CEO in Hong Kong from 2009 to 2012 and the Best Director of Asia in 2011. According to Forbes, his fortune is $3 billion. Lawrence Ho occupies the 515th leading position on the Forbes World's Billionaires list and the 31st position on the list of the 50 richest persons in Hong Kong.
Why Primorye Has Been Chosen?
Lawrence Ho, as well as other gambling operators with a worldwide reputation, doubted whether it was reasonable to invest in Primorye or not. However the fact that this place is located near the Northeast China, low tax rates, and relatively low minimum investments were sufficient reasons to take a risk.
In September 2013, Lawrence Ho promised to invest $700 million in a casino project by signing a contract with the Russian authorities. After all, the company had to invest only a few hundred million dollars to enter the Russian market. Let’s compare this sum with the billions that were necessary to build new resorts in Macau. And taxes will vary from 3% to 7% of revenue as opposed to 39% in Macau. According to approximate estimates, revenues from gambling in Primorye will reach about 1.2 billion dollars per year at the beginning and rise to $5 billion over the next decade.
The Summit Ascent Holdings Ltd informed in its annual report, published in 2015:
[The project]has a very favorable tax conditions for gambling in comparison with other jurisdictions. It is expected to be the first and only legal casino that will operate in the Far East of the Russian Federation in the next few years. For these reasons, the group remains optimistic and, moreover, it tended to acquire and finally purchased an additional share in the project in the amount of 14 per cent in 2014.
Who Will Attend Tigre de Cristal?
Vladivostok is much closer than Macau to residents of North China. It is up to you to compare: the flight from Beijing to Vladivostok takes 2.5 hours in opposed to three hours and 45 minutes to Macau. Such cities as Heilongjiang, Jilin, and Liaoning located in the Northeast China, as well as South Korea and Japan, are also situated within a 3-hour flight.
Craig Ballantyne, a Chief Operating Officer and Co-Director of the Summit Ascent Holdings Ltd, who will monitor all operations of Tigre de Cristal Casino General, said:
Around Primorye over 100 million potential customers are concentrated. They want to gamble but there is nothing thereabouts. You need to spend at least eight hours to reach Macau, whereas it is possible to fly to Primorye much faster. Here is our idea.
The Russian authorities absolutely agree. The Primorye gaming zone is primarily intended not for Russians. There is China. It is a huge country full of rich people, and the most important thing is that they enjoy gambling and make high bets," - said Samoil Binder, Deputy Head of Russian Association of Gambling Business.
The similar opinion has Alexei Chekunkov, a CEO of the Far East Development Fund:
An important step that should be done to attract tourists is the development of new places of interest. Volcanoes of Kamchatka and Lake Baikal are wonders of the world that can attract many tourists. However cultural and entertainment top-level shopping centers, casinos, race tracks are in demand among tourists from China in the border areas. Such projects are emerging, but they should be implemented at the professional level in accordance with the current competition on the global market.
How Primorye May Benefit?
The administration of Primorsky Krai believes that the creation of a [LINK2 will become a new milestone in the tourism industry in the region and expects a lot from this initiative. Konstantin Shestakov, a Deputy Director of Department for International Cooperation and Tourism in the Primorye Krai, described the following prospects:
Only Tigre de Cristal Casino can provide 1.2 thousand people with jobs. By 2020, after opening of new objects, their number will have risen to 20 thousand. Roughly ten thousand individuals will be involved in the maintenance of this gaming zone. The passenger flow in the Vladivostok airport will increase to 5 million persons per year, and revenues of the regional budget from only one casino will reach 180 million rubles per year.
What is Happening Right Now?
All key jobs related to casinos, hotels, and restaurants have already been occupied, and managers are willing to start working. At the moment, dealers are training and studying Chinese. Up to 700 individuals will have been employed and trained by the opening ceremony, which will take place in August. As soon as the casino starts providing a full set of services, the number of employees will rise to 1,100.
The building whose total area is 35 thousand square meters is decorated with stained glass outside. The interior pleases visitors with the amazing columns and glittering chandeliers. The casino offers 800 slot machines, 15 baccarat tables, and 50 tables for other table games. Half of them are intended for VIP games.
Nowadays the casino operates 24 hours per day. Approximately 600 people are present for 12 hours. Three hundred workers will maintain the object the other 12 hours - said the Chief Engineer of the contracting agency Vadim Bamstein. Currently, workers are laying a water supply pipe. The sewer network is about to be prepared. They are also trying to launch boilers. The complex with a two-level gambling area has two restaurants, recreational zone, and 121 hotel rooms. Currently, the interior decorating process is still active. Next to the complex, there is a three-level parking created for guests. It is designed for 450 cars. The complex also has a separate parking for the staff.
In May, a special presentation for journalists and members of the Pacific Tourism Forum was held. However it is still problematic to get inside the building. Craig Ballantyne conducted a brief tour of the ground floor of the building and, as for the rest, he advised guests to "use their imagination." The administration promises that the construction will have been finished by the end of June. Then the other 6-8 weeks will be necessary to prepare the object to commissioning.
The hotel in the casino contains 119 rooms. Paintings and photographs of half-naked girls in the Russian ushankas (hats with ear flaps) serve as specific details of the interior. Chinese designers believe that foreign visitors will appreciate this. The average accommodation price is $150-180, and luxury rooms with the opulent design and functionality will cost approximately 1.5 thousand dollars.
"As for the level of services, our casino will not be inferior to Macau. Everything will correspond to the best world standards," - promised Craig Ballantyne. He stated that this was just the beginning. The entire gaming zone will include at least 24 infrastructural objects intended for entertainment and recreation. Ballantyne also explained that the casino title was derived from French:
The title Tigre de Cristal is composed of two components. The role of tigers in Asia and Primorye hardly should be clarified, and its "crystal" color should be associated with our intention to provide an example of reputable and pure business - crystal clear business.
So, we are waiting for June 28 when the opening ceremony of the first hotel complex in the Primorye gaming zone called Tigre de Cristal will take place. We hope that we will see an example of pure business in Russia. However the fact that this first casino is opened by such a great person as Lawrence Ho inspires confidence that the project Primorye will emerge in the way that we are waiting for.