Posted on: March 22, 2022, 10:08h.
Last updated on: March 22, 2022, 10:08h.
Russia’s economy is suffering tremendously due to sanctions and commercial exoduses as a result of the country’s invasion of Ukraine. However, a South Korean firm is willing to ignore the troubles to build a casino resort in the Russian Far East.
Russia is currently in a state of instability. It has lost commercial activity as a result of its invasion of Ukraine and sanctions against the government and leading figures continue to mount. This led NagaCorp to determine that moving forward with its integrated resort (IR) in the country doesn’t make sense.
The same can’t be said for Plgen Holdings Co Ltd. The South Korean company just committed itself to a major investment to build a new IR in Primorye in the Russian Far East. It apparently doesn’t mind the negative attention Russia is currently receiving.
New IR Planned for Russia
Plgen Holdings Co Ltd, the first South Korean company to commit to a Primorye casino project, has announced that it will invest around $23.4 million to build the first phase of a massive IR in Russia, according to GGRAsia. The property will span 25 hectares (61.77 acres) across two plots in the gambling zone.
The project will initially include a casino and a hotel with over 100 rooms, although additional rooms could be added later. This phase will open before the end of 2025. The second phase will include additional amenities, including a theme park and other attractions. The timeline for that part of the development hasn’t been revealed.
Plgen Holdings has been negotiating the potential IR with local authorities since some time last year. Information circulated last September about a possible deal and, this past February, company representatives met with officials once again to formalize their interest.
The company asserts that it has a strong team of experts ready to manage the project. It didn’t name names, but explained that the individuals have “extensive experience” in running gambling and entertainment operations across Southeast Asia, including in South Korea.
Primorye Region Growth Stalls
Five years ago, there were big plans for what would become known as the Primorye Gambling Zone. At the time, it seemed like adding a massive tourist destination to the otherwise lackluster geography made sense.
There was a lot of attention and enthusiasm at first. Summit Ascent helped bring the Tigre de Cristal IR to life in the region and was joined by Shambala Casino. NagaCorp added its name to the mix, as well, before bowing out recently over the tenuous situation in Russia.
Tigre de Cristal and Shambala are in operation, but neither has lived up to expectations. They began to see some progress as they emerged from COVID-19 lockdowns last year; however, this will likely change now.
It’s possible that Plgen Holdings ultimately might not be able to realize its plans, at least not in the timeframe it hopes. Most gaming companies aren’t willing to do business in Russia, which could mean the company will have difficulty finding a supplier.
In addition, the US and the European Union are implementing new sanctions against Russia as the illegal invasion of Ukraine continues. These will not only harm the local economy, but make it more difficult for US allies to do business with Russia.
Some global leaders are calling for a total trade embargo with Russia. That may not be realistic or feasible, but it would definitely bring new internationally-led projects to a halt.