CASINO

Lawrence Ho boosts stake in Russian casino project

TAGs: Lawrence Ho, oleg drozdov, primorsky territory, primorye, Russia, summit ascent holdings

russia-lawrence-ho-summit-ascentMacau casino figure Lawrence Ho (pictured) looks set to boost his interest in his casino joint venture in Russia’s far east. Ho, who controls two-thirds of casino operator Melco Crown Entertainment, is part of a three-way consortium looking to build a casino in Russia’s Primorye territory near Vladivostok. Ho’s stake in the project comes via Summit Ascent Holdings, in which Ho holds a 33.8% share. The other partners are Taiwan-listed gambling device firm Firich Enterprises Co. and local developer Oleg Drozdov.

Drozdov, who holds a 30% stake in the joint venture, made headlines in November when he was detained by Russian police over alleged impropriety at a waste treatment plant built by another Drozdov company. While Drozdov’s attorneys insist no charges have been laid, Drozdov has yet to be released and the investigation is ongoing. Sources told the Wall Street Journal that Drozdov now intends to sell half of his stake in the casino project.

Summit Ascent, which currently holds a 46% interest in the joint venture, would see its stake boosted to 60%. Ho holds an additional 5% in the First Gambling Company of the Far East joint venture via his Melco International Development. Firich would also increase its stake from 19% to 20%, leaving Drozdov’s stake at 15%. The Hong Kong Standard reported that Summit Ascent may have to raise additional capital – possibly via a sale of shares to Firich – to make the sale a reality.

The first phase of Ho’s project is set to open by the end of 2014. It is one of only two confirmed casinos being built in the Primorye gaming zone. Cambodia’s NagaCorp is planning a $350m casino it hopes to open by 2018. Despite tempting operators with the lowest tax rate in the region, Russia has struggled to attract international interest in Primorye, much as it has in the country’s three other officially sanctioned gaming zones, which are located in geographically inaccessible parts of the country. Russia recently announced plan to institute another gaming zone in its newly annexed Crimean territory.

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