Inside Asian Gaming

REGIONAL BRIEFS The project has no gambling concession, however, and since the government is not likely to issue any beyond the existing six, the casino will require one of the concessionaires to partner with it as licensor under some form of revenue-sharing agreement. It is not known if such an agreement has been reached. To date, none has been disclosed. UGRM, though, is optimistic, based on the company’s ability to raise capital. “We think that as part of its due diligence the mainland bank would have sought requisite assurances on the project from the government,” the firm said. Ho’s Russian Partner Arrested Lawrence Ho’s partner in a planned casino near Vladivostok has been arrested in connection with allegations of misconduct in relation to the construction of a solid-waste treatment facility. Summit Ascent Holdings, Mr Ho’s investment vehicle for the project, said in a filing with the Hong Kong Stock Exchange that Oleg Drozdov had been detained by Russian authorities. Mr Drozdov is listed as an “indirect minority shareholder” with a 30% stake in the casino, which will contain 119 hotel rooms in its first phase and cost an estimated US$130 million. Mr Ho controls 51% of the project, which is being developed separately from his Macau-based casino operator Melco Crown Entertainment. A Russian entity controlled by Mr Drozdov holds the casino license, which was granted by the government of Russia’s Far East Primorsky state. It is one of four outlying regions where resort casino development is being promoted in the aftermath of a 2009 law banning the industry from the country’s major cities. Vietnam Rethinking Ban on Locals An advisor to Vietnam’s government says the country will allow its citizens to gamble in select resort- scale casinos within the next “two to three years”. “The Vietnamese government has sent a lot of delegations to Macau, Australia and Singapore to learn best practices,” Augustine Ha Ton Vinh said at a presentation at the Macao Gaming Show held last month at The Venetian Macao. The reform, if enacted, is in line with an official desire to promote economic development through foreign tourism, a policy that has been expanded recently to include plans for a massive leisure complex near Halong Bay, a popular holiday destination on the northeast coast about 130 kilometers from the capital of Hanoi. The government wants to attract at least US$4 billion in related investment into a special economic zone there and appears to have come around to the view that opening its domestic gambling market is necessary to the success of that effort. Vietnam is home to a popular lottery industry and a couple of small racetracks, but its 90 million citizens are not permitted to play at its dozen or so mostly small casinos, which are restricted to foreign passport holders. Locals, as a consequence, regularly pour into Cambodia, which hosts a thriving industry along its borders and in the capital of Phnom Penh. The potential of this market if it were redirected homeward has intrigued global operators of the likes of Las Vegas Sands and Genting, and more recently Vienna- based Casinos Austria International, which sent executives to visit the zone last month. Opening the domestic market also would go a long way toward rescuing the $500 million beachfront resort that opened on the south coast this summer about 90 kilometers east of Ho Chi Minh City. The Grand – Ho Tram, the largest development of its kind in the country, is reported to be struggling on the casino side in the absence of Vietnamese gamblers. An Upbeat Report on Slots in Macau Macau may need as many as 7,000 new gaming machines a year through 2017 to accommodate the next wave of Cotai casino openings, according to a new report compiled by a professor at Macau Polytechnic Institute. The report, released last month at the Macao Gaming Show held at The Venetian Macao, concedes the figure is only an estimate given a number of factors, including the impact of underperforming slots, which are regularly pulled from the city’s highly competitive floors. Replacements run as high as 20% of the total market annually, and the city’s inventory actually declined by 10% in the nine months through September to 14,775, according to official data. Also, two neighborhood slot parlors, part of the Mocha Clubs chain owned by casino concessionaire Melco Crown Entertainment, were scheduled to close last month. Nonetheless, Zeng Zhonglu, an associate professor at the institute and the principal author of the report, is optimistic about the prospects formachine gaming inMacau, and the report forecasts a net increase in demand market-wide, once all six Cotai resorts are up and running, at 10,000 units. Slot revenues were up nearly 13% year on year in the third quarter. Through September, slots accounted for 4.1%—US$1.33 billion—of total gaming revenues. The Grand – Ho Tram December 2013 | INSIDE ASIAN GAMING 43