The up and coming Russian casino market of Vladivostok scored its first big-name participant.
Lawrence Ho, the son of Hong Kong billionaire and Macau casino giant Stanley Ho, said his two companies would spend $630 million to buy a 51 percent stake in a business building two casino resorts in the Primorye Region near China’s border.
Bloomberg News reported the companies’ filings to the Hong Kong’s stock exchange last week.
Lawrence Ho is partners with Australian businessman James Packer in Melco Crown Entertainment, which several large and small casinos in Macau, including the City of Dreams complex, the Altira Macau and the Studio City development project.
“It’s a rather small investment for Lawrence, compared with other projects he has in Macau,” Jeremy Tan, a Hong Kong-based analyst at Kim Eng Securities Ltd., told Bloomberg. “It enables Lawrence and his companies to have a first-mover advantage tapping into the Northern Chinese and Russian markets.”
Vladivostok is one of four areas deemed by the Russian government as an Integrated Entertainment Zone where legal casino gaming would be allowed. The territory is best known for fish processing and heavy industry.
Vladivostok is a two and a half hour flight from Beijing.
The tourism zone is expected to include hotels, retail, an amusement park and a golf course.
Last year, Mark Galeotti, the academic chair of New York University’s Center for Global Affairs and an expert of Russian organized crime and security affairs, warned that gaming would attract Russian gangsters who view the casinos as fertile ground for money laundering and other rackets.
Galeotti said Vladivostok is an infamous criminal haven. The port allows smugglers to move goods in and out of China while black market automobiles can move easily to and from Japan.