NagaCorp Ltd, operator of Cambodia’s biggest casino, NagaWorld, is investing $350 million to develop a hotel and casino resort complex in Russia, seeking to benefit from the tax environment and the location near the country’s wealthy Asian neighbours.
The Hong Kong-listed company said in a statement filed with the stock exchange yesterday that the new complex, called Primorsky Entertainment Resort City (PERC), will be located in the Integrated Entertainment Zone (IEZ) of the Primorye region in the far east of Russia.
“PERC aims to be the epicentre of the gaming zone in Russia,” the company said in a statement on its website.
The Integrated Entertainment Zone is one of four government-designated gaming areas in Russia.
“Russia currently offers a favourable tax environment for gaming business as compared to other more established gaming jurisdictions,” the company statement says.
According to NagaCorp, the only gaming taxes are monthly fees of $4,200 per gaming table and $250 per gaming machine.
The statement also said that the administrative centre of the region, Vladivostok, is a city closely located “to a range of important tourism markets” such as South Korea, Japan and China. NagaCorp hopes that the project will “enable the group to participate in an exciting new casino market offering the potential for attractive investment returns.”
“The company envisages that with a population of about 300 million and a combined GDP of $7 trillion in the surrounding target countries – Northeast China, South Korea and Japan – there is considerable demand for affordable and good-yield hotel suites units sited in the IEZ.”
As for capacity, the new complex is expected to have at least 100 gaming tables, 500 gaming machines, a theatre facility that can fit 2,000, as well as karaoke and a spa. It will include approximately 1,000 hotel suites that NagaCorp is betting on selling to Russian and foreign buyers, mainly Chinese, South Korean and Japanese.
NagaCorp entered into the agreement on Friday, but the complex isn’t slated for completion until 2018 because of permits and construction.
NagaCorp in Cambodia could not be reached for comment, while the Hong Kong office referred the Post back to the office in Phnom Penh. The media contact for NagaCorp’s NagaWorld casino in Phnom Penh, Hem Sopheak, said she wasn’t briefed on the project.
NagaCorp’s financial results for the six months ending June 30 show that net profit increased by 20 per cent to around $62.9 million.
At close yesterday, shares in the gaming company were up 3.9 per cent, at HK$6.92 (US$0.89 cents).