NagaCorp Ltd., the owner of the NagaWorld hotel and casino in Phnom Penh, announced Monday it has plans to invest $350 million in a Russian gaming resort near the border with China.
The resort, to be built just outside Russia’s eastern port city of Vladivostok in Primorsky territory, will be known as the Primorsky Entertainment Resort City (PERC) and is the company’s first investment outside of Cambodia, where it holds an exclusive license to operate a casino in Phnom Penh.
In a public announcement to the Hong Kong Stock Exchange, NagaCorp said the new resort will sit on about 215 hectares of land dubbed an “Integrated Entertainment Zone,” which will allow gambling and will include 1,000 hotel suites, 100 gaming tables, 500 gaming machines, a 2,000-seat theater and several entertainment, food and beverage outlets.
Each hotel suite will measure 120-square meters and will come with two bedrooms, a lounge and a kitchen. NagaCorp plans to pre-sell the suites as part of a program known as “Primorsky My Second Home.”
Giving the project a green light, an agreement between NagaWorld CEO Chen Lip Keong and Russia’s Primorsky territory governor, Vladimir Miklushevsky, was signed in Vladivostok on Friday.
“The vision of the company is to ultimately develop a sustainable city called PERC in the Primorsky [territory], Vladivostok, combining the elements of environment, business and community so that PERC is environmentally friendly, socially responsible and economically viable…. The future is a cosmopolitan and comprehensive community of not less than 20,000 people,” NagaCorp said in an announcement to the market.
It added that the company’s target market was from the “colder climate regions of Northeast China, South Korea and Japan.”
NagaCorp said it plans to open the new, highly ambitious resort sometime after 2018 and that construction permits would be obtained in “one to two years” after it establishes a subsidiary to apply for casino permits.
One possible lure for NagaCorp to Russia is the country’s low gaming tax.
“Russia currently offers a favorable tax environment for gaming business compared to other more established gaming jurisdictions,” the announcement said, citing that Russia’s gaming tax is at about $4,200 per table per month and $250 per machine per month.
NagaCorp is one of two companies to invest in a casino-resort in Russia’s Primorsky territory. The other is Hong Kong-based Melco International Development Ltd., owned by Macau businessman Lawrence Ho, who on Friday also signed an investment agreement worth $700 million for a separate casino-resort, according to media reports.
NagaWorld intends to pay for the investment through equity or taking on debt or a mixture of both.