Will Vladivostok Become A Mini-Macau? Part 2 - Investment Strategies
Nash Dom Primorye is asking prospective investors to suggest how junket operators should be regulated. One of the attractions of the project for gaming companies is that, unlike in Macau and Singapore, in the Vladivostok entertainment zone no tax will be levied on gross gaming revenue. The casino has 25 VIP tables which will be mostly occupied by rich Chinese playing baccarat. A few months ago, the operator opened Naga 2, which is already considered profitable. Earlier this year Daiwa Securities produced a report see here about Summit Ascent, where the authors stated that:.
An Imaginary Jewish Homelands Project
The Development Corporation obviously expects this to be a successful process as their Director, Andrey Folomeev said recently that 2 further plots may be also opened up for bidding after this round of auctions.
It appears that of the 3 plots available, 2 of these plots have received bids so far - presumably those with more attractive locations within the development. Of course, this may change by the time the end of September rolls around. At the least it implies that there will be 2 more casinos in the IEZ, which will bring the total to at least 5 casinos. That is starting to look more like a more interesting tourist destination than just the single casino that is currently operating in the zone.
The other major news, whose importance should also not be underestimated, is that the expedited electronic visa program went into operation in early August. Although this list appears quite eclectic, the most important country here is China, as this is the main addressable audience for the casino development.
There is no consular fee and the visa is issued for a period of 30 days, with a maximum stay of no more than eight days see here for the visa website and here for more info. After much foot-dragging on this issue, its implementation should improve the fortunes of the Tigre de Cristal casino owned by Summit Ascent significantly in the second half of the year. This, coupled with the fact that the management of the Vladivostok airport has now been handed over to a Singaporean concern see here , so as to develop the international linkages from Vladivostok to other major population hubs notably in China , bodes well for the future development and the attraction of the zone.
An article appeared online see here stating as such, although this is still speculation and has not been confirmed elsewhere. Indeed, there is nothing on the Development Corporation's website stating or suggesting that this would or could occur. The full release can be accessed here.
There have also been rumors that an agreement with Kangwon Land , South Korea's largest casino operator, might materialize on a possible joint investment for Phase 2.
Nevertheless, until at least , Summit Ascent is the only game in town right now. Earlier this year Daiwa Securities produced a report see here about Summit Ascent, where the authors stated that:. Daiwa further noted that Tigre de Cristal offered much better margins than your typical Macau casino:. Daiwa also noted that operational costs at Tigre de Cristal were much lower than in Macau. Lower taxes and wages, plus proximity to the Chinese market, and the new measures going into place in Macau see here for example , all make Vladivostok a much attractive location for gaming than Macau right now, but of course Vladivostok doesn't have the range of activities and tourist attractions that Macau has, so has yet to acquire a "destination effect".
It is the sole owner of Nagaworld Ltd in Cambodia's capital, Phnom Penh, where it has a 70 year license and exclusive rights to gaming in the capital until Nagacorp's share price has been on a downward trend but appears to have bounced in the last month. Most of this is due to recent developments whereby bonds for the phase 2 of the Nagaworld complex in Phnom Penh issued to a group of investors will be converted into common stock.
This suggests that the continued profitability of the organization is assured now that phase 2 is in operation. This leaves shareholder value diluted due to a large increase in the number of shares issued from 2. But it also leaves Nagacorp able to issue more convertible bonds or regular bonds in order to finance its Russian construction. The dividend yield is 4.
See the Nagacorp website for more details on first half interim results. The development of a the Naga Vladivostok casino has now begun, but because of a halt in construction due to significant archaeological artifacts being found on the site, the date for completion has now been pushed back to first half of The construction will be by the water's edge, so probably is the best site available in the IEZ. Nagacorp itself has not said too much about its development yet, but given that its business is heavily concentrated in Cambodia, the Primorye IEZ investment is likely a means of diversifying away from a single market, something which may be an attractive idea to Macau casinos in particular.
The first of its casinos will be called the Selena, and it will have a twin tower hotel, with rooms, and a casino located in between the two towers. The Selena has been designed by Steelman Partners, the architects who have designed most of the world's leading casinos.
The end August deadline will likely see 3 new casino operators given rights to develop properties at the IEZ. If so, that will really launch the project and likely see the critical mass of operators to ensure that the project is a success. In the likely event that this happens, then this will see a whole layer of risk removed, and a likely surge in the price of Summit Ascent in particular. An article here talks about how the Russian authorities view the prospects for new entrants. For more information, visit EuropeanGamingCongress.
Produced by Clarion Gaming. For more information, visit iceafrica. Harrah College of Hospitality. Produced by Eventus International. For more information, visit bigafricasummit. As ia Gaming Summit , Taipei, Taiwan.
Produced by Beacon Events.