- Casino development area situated near North Korea and China
- Three new plots in the site have failed to attract a single bidder
It seems that Russia’s attempts to lure foreign capital to its Primorye casino development zone are failing to achieve results.
Back in July, the federal government launched an auction offering three plots of land in the development area.
But, according to reporting done by GGGRAsia, despite an extension in the bid deadline from late August to September 28, no bids have been received.
The Primorye development is offering some of the world’s most competitive land-based casino tax breaks, and its location near to China offers the potential for hundreds of millions of customers, yet despite these apparent advantages the site currently boasts only one casino.
Escalation of hostilities
One factor that could be deterring investors is the site’s proximity to North Korea. The Primorye is located on the south-east Russian coast, and as well as sharing a long border with China, it also borders on the state led by Kim Jong Un.
Back in the spring, Russian military equipment was sent to the region in reaction to the escalating tension between the US and North Korea.
In the event of a pre-emptive US nuclear strike, any resulting contamination would reach, and although such a scenario is unlikely, it could be enough to deter investors in the region.
One investor who has taken a chance on the site is Macau casino operator Lawrence Ho.
He invested $900 million in the Primorye’s only casino, the Tigre de Cristal, but he has since taken steps to reduce his risk by selling a number of shares in Summit Ascent Holdings, the resort’s developer, while two other developers – NagaCorp and Diamond Fortune Holdings – have been dragging their feet on proposed projects.
Last summer, the Russian government said it was taking control of the site and created the Primorsky Krai Development Corp to oversee the auction, but this move has not met with success and investors remain wary about committing to the site.
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