Summit Ascent Holdings, owner-operator of an integrated resort near Vladivostok, says it will utilize a direct VIP model at the resort, Tigre de Cristal, rather than rely on controlling shareholder Suncity Group to bring in players.
According to a note from Goldman Sachs, cited by Inside Asian Gaming, the plan was revealed during a corporate meeting earlier this month. the operator plans to extend credit directly to its own players, using Suncity’s database.
Suncity Group owns 69.66 percent of Summit Ascent, which holds a 77.5 percent interest in Tigre de Cristal’s operating entity, Oriental Regent Ltd.
Goldman Sachs said the plan will allow the company to “preserve more profit without having to pay junket commission,” but it will also mean that Summit Ascent must bear credit risk on its own. “Management believes it is manageable given its limited VIP exposure initially,” the investment firm noted. “Overall, they believe US$200 million EBITDA is achievable in the longer run.”
It also became known that Tigre de Cristal has seen rapid recovery in recent months and posted positive EBITDA for the six months to December 31 over a US$3 million EBITDA loss in 1H20.
When cross-border travel resumes, the property will cultivate players from South Korea, China and Japan. Korea is also seen as a rich potential source of players.
Suncity management “believes Koreans’ gaming demand is underserved and targets to growing its customer base there, as a way to diversify its exposure from Chinese gamblers,” the note said.
“For instance, despite a one-single property 5-hour drive away from the city of Seoul, Kangwon Land contributes over half of Korea’s gaming revenue.
“Given the proximity between Vladivostok and South Korea (a two-hour flight), they believe Tigre de Cristal should be able to capture such underserved Koreans’ gambling demand.”
