Macau's Melco Crown Entertainment To Operate Casino Resort in RussiaJuly 3, 2013 1:19 pm
Melco Crown Entertainment, which runs a string of casinos in Macau and around the world, is now planning on entering the Russian market after it was announced it would be opening a casino in the country’s eastern region bordering China and Korea.
The planned casino resort will be located in Primorye on the outskirts of Vladivostok and is expected to open in late 2014, “subject to fulfillment of a number of conditions including legal, accounting and construction due diligence,” according to a statement issued by the company on June 28.
Back in 2009, Russia made it illegal to gamble in casinos outside of its four special zones, and Vladivostok is of particular interest to Melco Crown Entertainment as it is effectively an Asian casino opportunity that happens to be located in Russia. In fact, the new casino’s nearest competition will come from Asian nations such as the Philippines and Vietnam, which are also building similar tourism zones.
Therefore, the Russian casino opportunity will appear as a particularly attractive proposition for Melco Crown Entertainment Ltd and its co-chairman Lawrence Ho, not only on account of its close proximity to northeast China, but also on account of its low set-up cost, as well competitive tax rates. The company has estimated that the taxes it would pay will amount to between 3% and 7% of revenue, significantly lower than the 39% rate it pays in Macau.
It was last summer that the Primorye government invited companies to bid for casino projects in the region and up until now five potential casino builders have been identified hailing from the U.S., Malaysia, Russia, Macau and Hong Kong. However, it is still unclear just how many companies will be chosen to build casinos in Vladivostok.