Russia banned casinos in 2009 but has authorized five special integrated gambling zones since then, the last being Sochi (pictured) the mostly abandoned site of the 2014 Winter Olympics. The first of these zones to open an integrated resort casino is located near Vladivostok, in the Far East. The Primorye Integrated Economic Zone (PIEZ) is being called the “Northern Macau” by some Russians.

Russia would like to turn Vladivostok into its biggest gambling hub and is currently looking to attract foreign investors by offering them a gaming tax of around 2 percent. Macau has a gaming tax of 39 percent while Singapore has gaming taxes priced between 12 to 22 percent and Russia hopes that this massive tax reduction will help to establish its casino industry.

Summit Ascent Holdings, a firm backed by Hong Kong mogul Lawrence Ho opened its Tigre de Cristal casino in October 2015 and has had a great response since then. The local government has termed the Tigre de Cristal casino as the biggest and best equipped casino in Russia. The casino is expected to enjoy a monopoly over the Russian market as competition from the next casino is only expected to start in 2018.

Some of the other gambling concerns that have begun construction in the PIEZ include Diamond Fortune Holdings Prim, Royal Time Primorye and NagaCorp Ltd. US based market research firm Global Market Advisors stated that the gambling zone next to Vladivostok could generate up to $5.2 billion by the end of 2022.

In a statement, Eric Landheer, director of corporate finance & strategy at Summit Ascent said “Vladivostok is arguably the most European city in Northeast Asia. As the Russian government is now very keen to boost tourism and diversify its economy, we are optimistic about the future”.

The growth of the gambling industry in Russia will depend largely on the support provided by the government, a struggling economy and the performance of the gaming market in North Asia. Global Market Advisors stated that Vladivostok appears to be the most likely to benefit from the gambling industry as proximity towards Japan, South Korea and Northern China meant that the casino industry could focus on attracting mass market and VIP gamblers from Asia.

While Vladivostok is just a three hour flight away from these locations, with hundreds of millions of potential customers, visa policies could pose a hindrance in bringing in consistent gaming traffic from Asia. While Russia has taken steps in the recent past to relax its visa policies, Global Market Advisors believes that more must be done if casinos are to depend on a constant floor of gaming traffic from Asia. Less than 2% of Macau’s gambling traffic comes from Northeast China and Russia will be able to capitalize on this market if Vladivostok gaming zone is positioned and marketed correctly. However on January 1, Vladivostok’s designation as a free port could open the door to 8 day visa free stays by Chinese visitors arriving by bus, as well as open the nearby international airport to visa free travel to others in the near future.

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