«A New Las Vegas for Asia’s Gamblers Located in Russia’s Far East
On the Eastern rim of Russia, where the economy is developing dynamically, a new mystical palace is rising with dark forests around. It is a casino, which was created in order to attract some wealth of nearby South Korea, China and Japan.
The innovative answer to magnificent Las Vegas is located about 4,000 miles away from Moscow, closer to deep-pocketed Asians, who are invited to enjoy some risk and wager some money on Russia’s roulette wheels and baccarat tables.
The casino, called Tigre de Cristal, is the largest gambling complex in Russia. It’s expected to become a vast entertainment zone, embracing eight betting palaces. The main sponsor of the casino complex is Hong Kong’s company, called Summit Ascent. Apart from that, some investments also come from China.
Long ago Nikita S. Khrushchev wanted Vladivostok to become “a second San Francisco”, because the port city has everything necessary: magnificent natural beauty and favorable location close to important Asian countries. However all those dreams were followed by disappointment.
Under President Putin, billions of dollars have been invested into a university campus, several broad bridges and other expensive and important projects of this area. However, according to Artyom Lukin, Far East Federal University professor, Moscow suddenly understood that free money was not coming from China, no matter how close relations the both countries have.
Instead of Chinese money, Chinese gamblers are coming to Tigre de Cristal, and there are some reasons for that. First of all, gambling is forbidden in their own country, in China. Secondly, Tigre de Cristal is the only casino, located close enough to 100 million people, who live in the neighboring provinces across the border. Of course, they can go to Macau and enjoy the first-class level of gambling, but Vladivostok is still closer than Macau.
All Chinese gamblers can’t help comparing the Russian product with Macau, and this comparison is not in favor of Tigre de Cristal. Li Yunhui, a gambler and businessman from Mudanjiang, says that the Russian casino has several advantages. At first, it’s close to China, and secondly, the air is quite clean in the area. We can say that this area combines gambling and ecotourism.
Li Yunhui also compares Russia’s Far East and China. He has been visiting Vladivostok since 1990 and he says that the level of the local economy growth is like Chinese one, but decades ago. He says that this area reminds him of a developing country. He even tried to create his own business in Vladivostok, but got severely disappointed with the slowness and red tape.
The gambling business in Vladivostok confirms Li’s words, because the things here are getting done very slowly. The local government had the idea of creating a gambling zone in the forest about ten years ago and assigned Oleg Drozdov, a local businessman, with a task of building a casino and hotel complex for Tigre de Cristal. But soon after this assignment Mr. Drozdov got arrested on corruption charges, so he couldn’t finish the project and left only a concrete shell of a building.
Hong Kong’s company, Summit Ascent, turned this concrete shell into a palace and now owns about 60% of the project. Other investors put about $200 million into the construction. The casino opened its doors in 2015.
At the moment the project keeps on developing. The company is going to build another luxury hotel together with some extra gambling rooms, a large golf club and other important facilities. The company is going to invest about $500 million into this project.
Other companies are planning to build their casinos at the same entertainment area. Though they are rather behind schedule, they are expected to open their doors soon. The forest nearby is dotted with signs of construction. One of the casino projects has already been canceled by the local court because of great slowness of getting the rights for the ground.
Summit Ascent’s director, Eric Landheer is responsible for financial strategy of the company. He says that Summit Ascent has an advantage of the first mover, but still they don’t want to remain the only one casino in the forest, because gamblers love many casinos in one area.
The whole history of gambling in Russia can’t be called a triumphal one. The Russian Orthodox Church shaped negative attitudes towards gambling and called casinos devil’s work. Some Russian writers, including Fyodor Dostoyevsky, described gambling addiction in their books.
The current President of Russia, Vladimir Putin, continues this negative attitude, saying that gambling may make people lose their last pennies and pensions. He banned slot machines and casinos in Russia in 2009, but not on the whole territory of the country. Tigre de Cristal is a good source of salary for about 1,000 Russian people, who work for the casino. They earn the money, which gamblers from China and other Asian countries lose there.
On the whole, the money, earned by the casino, was desperately needed by people of the Primorsky region, located around Vladivostok. The city was trying very hard to attract investments from outside. Nowadays the city has regular flights to and from many Chinese cities, including Beijing. Moreover, it’s possible to reach the city by train or road.
Moscow is planning to establish four gambling zones on the territory of Russia. All of them are located in different cities, far from each other. For example, a gambling zone in Kaliningrad is going to attract people from countries of Europe, including Poland. The other two gambling zones are located in Altai and in Sochi.
Tigre de Cristal is open not only for foreigners, but also for Russian people. If they want to take part in gambling fun, they have to register and show their passports. Of course, Russian priests are against the gambling zones in Russia. They are supported by a great number of various people. For example, Vladivostok journalist, Andrei Kalachinsky, reminds of Dostoevsky’s book about gambling.
Another problem, which doesn’t help the gambling zone to develop, is transportation infrastructure. The city needs a good and broad highway from the local airport to the casino, but now the road looks like a mud track. Another road, leading to the center of Vladivostok, is heavily clogged with traffic. That’s why some government representatives propose opening a special ferry service for foreign gamblers.
Another obstacle is connected with visas. The local authorities promised to make a visa-free entry for gamblers from China and some other countries, but they are quite slow in delivering this promise. At the moment, Chinese tourists do obtain visas, but this process is relatively easy for those, who sign up for a tour. That’s why number of Chinese tourists, visiting Vladivostok, has been increasing.
Local authorities are considered to be hindering foreign investments, if they don’t bring profit to them personally. Critics of the government warmly welcome casinos for foreign gamblers, because they are expected to give more working places and money to the local people.
Tigre de Cristal is a competitor to a great number of illegal casinos, hidden in various cities of Russia. The local government is trying to fight against this illegal gambling business, but this is not easy due to great scales of corruption.
Tigre de Cristal is not the only one project, created for attracting foreign investments. Two Hyatt Hotels were supposed to have opened their doors about five years ago, but this project failed and the buildings are still under construction. So, we can say, that the casino is the only project, which reached its goal and was finally completed. Moreover, this project is making some profit!
Lawrence Ho, a chairman of Summit Ascent and a son of Stanley Ho, a gambling tycoon of Macau, says that the first year of Tigre de Cristal had some challenges, but still he expressed his optimism about the overall potential of the casino.
The main source of profit for the Russian casino is rich high-rollers, coming from China and other countries of Asia. They are invited to the casino by special agents, who arrange everything necessary from travel expenses to private VIP rooms. Those agents are payed by the casino, and this practice is quite common for many casinos, including those of Macao.
Many junket agents and managers from China complain that Vladivostok differs from Macau greatly, especially in winter, when it’s too cold in Russia. That’s why he says that this casino will never attract gamblers from other countries except China and few other countries of Asia.
Another drawback, found in Tigre de Cristal, is lack of prostitutes. Prostitutes in Macao are reported to be far cheaper and more readily available, than in Russia. The company’s finance director, Mr. Landheer, says that his company takes to responsibility for quantity and quality of prostitutes. Moreover he stresses that he is against any illegal activity, including prostitutes. Mr. Landheer adds that Vladivostok has many other attractions and cheap service providers.