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Robust shoots of roulette business
The entertaining and resort zone in the East of Russia does not yet meet the expectations of regional officials
Tourism is conceived by regional and federal authorities as one of the drivers of economic development of the Primorsky Territory. And the gambling business is called to become a powerful component of tourism - represented by the Primorye integrated entertainment resort zone (IRPK) which has been under construction for several years. Alas, despite repeated demonstrations of optimistic expectations from a number of officials and businessmen, the gambling industry is stalling. However, EastRussia experts believe that this is temporary.
The first casino worked at a loss
Thus, the Tigre de Cristal entertainment and gaming complex that opened in November (casino on 2015 machines and 759 gaming tables, as well as a hotel of the highest category with a number of rooms in 67 number) not only showed losses for the year of $ 121 million, but and became a defendant in arbitration proceedings. LLC “Primorye-Dalniy Vostok” Construction Company (PDV), in the middle of last year, filed three claims against the casino operator, OOO иí11 InterTeing, with the Arbitration Court of Primorsky Krai. The amount of claims (for allegedly unpaid construction work, which was performed as a general contractor for PDV) - about 1 million rubles. Moreover, PDV requires to recognize LLC "X51 InterTinement" as much as bankrupt.
Recall, Tigre de Cristal - only one of the objects of the integrated entertainment resort zone (IRKZ) "Primorye", which is built today in the space of 620 hectares between Vladivostok and its satellite city Artem - in accordance with the order of the Government of the Russian Federation from 2009 year. The latter, in turn, was due to the law adopted in the same year. According to him, all gaming points in Russia had to be closed, or go to work in special gambling zones. The place of their location was chosen Kaliningrad region, Krasnodar Territory, Altai and Primorye. Subsequently, the accent was made not on gambling (gambling and not too conformable to traditional ethical notions of Russians) component, but on resort and entertainment, designed to stimulate the development of both domestic and inbound tourism in the country. According to plans, the Primorye IRKZ should be fully built up and fully ready for operation in 2022 year. Infrastructure ICRP - engineering and road - is created at the expense of the regional budget. About 800 million rubles have been allocated for these purposes.
In addition to the Melco group of companies, the Malaysian company NagaCorp Ltd, Royal Time Primorye and Diamond Fortune Holdings Prim have become the key investors in the Primorye Irkutsk Refinery. The last operator has already begun construction of the Selena resort and entertainment complex. According to official information from the management of Diamond Fortune Holdings Prim, the completion dates for the complex remain unchanged, from the end of 2017 to the beginning of 2018. The work is proceeding in accordance with this schedule.
“All the projects that our company implements at the Primorye ICRZ have already been presented. In September last year, at the Eastern Economic Forum, the project of the hotel and entertainment complex Selena was presented. In March of this year, at a meeting of the working group of the Primorsky Territory administration and in the media, we presented three new complexes - Golden Gate, Moon Gate and Sun. The company has already started active work on the construction of the latter - it is being built in parallel with the Selena complex. We intend to start the construction of Golden Gate and Moon Gate in 2018, '' the correspondent said. EastRussia Evgenia Varakina, spokesman for Diamond Fortune Holdings Prim. - Today our company is preparing to participate in a major tourism event that will take place in May - the Pacific Tourism Forum and PITE Exhibition. During the forum, there will also be a presentation of all our complexes for residents and guests of the Primorsky Territory. "
Despite difficult times for the economy of the country and the region, in particular, the officials of Primorye are confident in the success of the gambling enterprise. They agree with the assurances of Craig Ballantyne, CEO of G1 Entertainment, that “The opening of the first casino will strengthen the investment position of the region, transform Primorye into a world-class recreation destination and attract visitors from all over the Pacific Far East. Vice-Governor of the Primorsky Territory Sergey Nekhaev, who oversees the tourist and recreational direction, is convinced that Vladivostok and the Primorsky Territory as a whole are intended to become a tourist hub in the Asia-Pacific region. And IRZK "Primorye" will contribute to this to the maximum extent, since "recognized leaders of the world entertainment industry invest in it." The positive attitude of Konstantin Shestakov, director of the tourism department of the Primorsky Territory, is primarily due to the fact that “the first in Primorye - and the largest in Russia - casino, like the entire IRKZ as a whole, will not only give a powerful impetus to the development of tourism and provide thousands of residents of the region with workers places. According to the official's calculations, we are talking about about 3000 new jobs within a year and a half to two years after the launch of the first IRKZ complexes and revenues to the regional budget (only for the gambling business tax) - in the amount of more than 1 billion rubles annually.
Bet on neighboring China
Timur Nigmatullin, financial analyst (macroeconomics, IT & consumer) of the FINAM group of companies cautiously optimistic about the prospects of the gaming business in the south of the Far East: "JX1 Interactive, after a month of working in the test mode, opened the first casino in Primorsky Territory only on November 11th 12. Thus, rumors of losses for 2015 year are not surprising. In 2015, I expect the enterprise to achieve self-sufficiency. Moreover, with a high probability, LLC will demonstrate a significant net profit. However, certain risks in itself are borne by the adoption of amendments to the law "On lotteries", which will promote the development of video lottery terminals. In this case, the payback period can be prolonged for a long time.
In my opinion, Primorye is currently the most promising gambling zone in Russia. So, even despite the relatively high state regulation and negative economic conditions, the return on investment in the project can be up to 1,5-2,5 years after the end of construction. Given the location of the zone, players from Asian countries in general, and from China in particular, will provide up to 50% of all visitors. Among other things, it will support visitor traffic and a weak ruble, since this circumstance makes inbound tourism advantageous in terms of the cost of recreation. Finally, I would like to note cooperation with world-famous investors, which will allow the project to pay off more quickly due to their expertise in the field of gambling business. ”
According to Marat Manasyan, CEO of M1 Solutions: “There are two factors that do not yet allow the gambling zone of Primorye to develop and work successfully. The first geographical factor is that Primorye is far removed from the European part of Russia, about 4% of the population of the Russian Federation lives in the Far Eastern Federal District, the majority of these people do not have significant incomes. The main migration of capital is negative, investors leave the region, preferring to invest in other regions of the Russian Federation or abroad. The number of people with an income level that allows them to visit gambling establishments is small, and only some of these people have a tendency to gamble.
The second factor: in Primorye, there is almost no infrastructure for servicing players. Or rather, gambling tourists. With developed infrastructure, the region, in particular Vladivostok, can become one of the centers of attraction for tourist-players. The construction of high-quality hotels, restaurants, service companies, putting in order the road and transport infrastructure - all this will give a powerful impetus to the tourist flow. First of all, when building infrastructure facilities, one should focus on Chinese tourism. With the weakening of the Russian currency to the dollar, the flow of Chinese tourists in the Far East has increased significantly.
From the economic point of view, the presence of a limited number of gambling zones, with proper control by the state, can ensure a significant inflow of funds to the budgets of the relevant subjects of the Federation. Politically, such decisions slightly contradict the previously announced position on gambling in principle.
In my opinion, changes in legislation not in favor of gambling in the current economic conditions are not economically justified. Gambling existed for many years and, throughout the history of mankind, enjoyed constant demand. After introducing restrictions on the game by adopting the relevant law, the gambling business moved to the Internet, where it continues to work successfully. At the same time, the state has lost the source of constant replenishment of the budget: Internet casinos, as a rule, are registered not in the territory of our country and are not obliged to pay taxes in our country. Demand for similar services is not weakening. It would be possible to widen the effect of the law on gambling zones a little, having created in each subject of the Russian Federation a separate territory, permitted for use as a gambling zone. On the one hand, this will provide consumers with a comfortable opportunity to meet their needs within their own region, on the other - to ensure control over the gambling business within the zone from the state and to replenish the budgets of the respective regions of the Russian Federation. "
Alexander Latkin, Director of the Institute of International Business and Economics, Vladivostok State University of Economics and Service: "Macao and Las Vegas are too far from our immediate neighbors from the Chinese north-eastern provinces of Heilongjiang and Jilin. Therefore, they, if there is an alternative in our glorious and close to them city, will rush here for entertainment and recreation. The same can be said about the guests from South Korea. As you know, already more than half of the rooms in the hotel just opened Tigre de Cristal hotels were booked by citizens of these countries. And they do not need a warm sea, since these people (businessmen and officials), in their mass, do not make a cult from the beach season. They would have to play, and have fun, and this can be successfully done inside a comfortable room in all respects. On the other hand, and in Vladivostok itself, there are many middle-class and wealthy people who can afford to get out on weekends - alone, with family or friends - to rest and maybe risk a thousand or two rubles at a gambling table ... ".
Photos from the casino site Tigre de Cristal