HLT Advisory Case Study
First Gaming Company of the East – Vladivostok, Russia (2012)
Understanding the Chinese market and the ability to segregate this market between different submarkets was a key focus of the analysis
First Gaming Company of the East – Vladivostok, Russia (2012)
In 2009, the Russian government determined that all casino gaming activity in the country would be concentrated within three designated gaming zones. The Primorye region of eastern Russia was designated as such a zone and the Oblast (i.e., state) government embraced the concept, identifying a 600-acre site near the Vladivostok airport as the target site. Vladivostok is the major city in the region and the capital of Primorye. A master plan for the Primorye Gaming Zone outlined the location for several destination casinos (including associated hotel, entertainment and related non-gaming uses). Proximity to a larger market (400 million people within a two-hour flight) is seen as the underlying basis for the interest in this Zone. At build out, gaming revenues have been estimated as high as US$5 billion
HLT was engaged to undertake a market analysis, business plan, financial estimates and a marketing plan for the initial licensee in Primorye: First Gaming Company of the East (“FGCE). FGCE controls Plot 10 with the Primorye Gambling Zone, as well as other lands, and is expected to open the Zone’s first casino.
The project included a detailed market analysis for casino gaming in the Primorye Gamiing Zone including an understanding of the competitive landscape (within Primorye and externally). Understanding the Chinese market and the ability to segregate this market between different submarkets was a key focus of the analysis (i.e., such as that drawn to Macau versus Primorye). HLT also developed a marketing strategy related to the market analysis and an indication of target market segments. For context (and to support the business case being presented to international investors) the report also detailed the broader gaming environment in Russia, including the void created upon cessation of gaming in 2009 and the current gambling regulatory and operational landscape.
