Having acquired the last available gaming subconcession in Macau, it is reported that James Packer of Australia’s Publishing and Broadcasting Limited (PBL) is in discussions with Russia’s Crocus Group to develop in Moscow the country's largest casino and entertainment complex. Crocus City, on the Moscow ring road, will have 24,300 sq m of gaming floor, 60,000 sq m retail space and an 80,000 sq m hotel. The Moscow Metro system has been extended and a new station is on site.

The ‘Las Vegas in Moscow’ is scheduled for completion in 2007 but already analysts are warning of complications of doing business in Russia. To add to this is the present uncertainty of gaming law in Russia. A new law is being considered by the state Duma, and in Moscow itself it appears that new municipal regulations are likely for the city. Much of this will doubtless favour the big gaming operators, as planned licence fees of over US$1 million would put an end to most of the competition from smaller outfits.

If the agreement goes ahead, then PBL would be the first foreign company operating in the Russian casino market but there have been high level complaints about the treatment of foreign investors in the country. Concern has also been expressed over difficulties in negotiating the complex Russian legal system. However, companies such as Storm International B.V., founded in Holland in 1992 and opening a Moscow office in the same year, now run successful casinos. Storm opened its first casino, The Vinso Grand Casino in central Moscow, in 1995 and now operates five.

The success of any business abroad is dependent on good local knowledge of markets and legal requirements. Barring complications such as Moscow outlawing casinos, which is unlikely owing to the gaming taxes received, Crocus City and its large casino will become part of the Moscow entertainment scene in due course. With limited expansion opportunities at home, PBL wants part of the US$6 billion Russian gambling market, just as it plans in Macau with Melco International and in the UK with Aspinalls. (E-05.02.06)

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