No plans for Crimea, Sochi
Tigre de Cristal, Summit Ascent Holdings’ new casino in the Russian Far East, has seen monthly rolling chip revenue rise about 700 percent increase since the property opened last fall.
Eric Landheer, director of corporate finance and strategy at the Hong Kong-listed company told GGRAsia the boost was due to “the continuing ramp up of the existing junkets we had at the property as well as the signing of a couple of Macau-based junkets in late June.”
In the six months to June 30, Summit Ascent said the monthly rolling chip turnover at Tigre de Cristal skyrocketed from HKD258 million (US$33.3 million) in November 2015 to HKD2 billion in July 2016 and HKD2.2 billion in August 2016.
“This validates the key aspect of our investment thesis—that the Primorsky Krai Integrated Entertainment Zone is the ideal location to capture the drastically underserved gaming demand from Northeast Asia,” the firm stated in an interim report. The IEZ is a special economic zone near Vladivostok was designated by the Russian government as a site for several casino resorts. Tigre de Cristal is the first.
“Currently we are at or close to 100 percent occupancy on most weekends,” Landheer said. “What’s been proven from the visitation we have had so far, is that the proximity and location argument has been validated.”
Four licenses have been awarded to casino developers in Primorsky Krai. NagaCorp Ltd is expected to be the next firm to open a venue in that Integrated Entertainment Zone with a property expected to open in the summer of 2018. Summit Ascent, spearheaded by gaming titan Lawrence Ho, said it expects to start construction of Tigre de Cristal’s Phase II “in the second half of 2017, and open the first stage of our Phase II for operations in the first half of 2019,” with the remainder opening about a year later.
“We want to maximize the opportunity without creating overcapacity prior to the demand,” said Landheer. “I don’t think we always necessarily subscribe to the ‘Build it and they will come’ philosophy. While we think that’s potentially a valid philosophy depending on the market in which you operate, we are continuing to be measured and prudent in our expansion approach.”
Summit Ascent Holdings Executive Director Craig Ballantyne has denied plans by the firm to invest in the gaming zones of Crimea and Sochi, contrary to recent media reports. According to the Asia Gaming Brief, four entities are now interested in developing a casino for the former Ukrainian territory; AGB reports that three are registered in Moscow and the fourth has “Spanish roots.”
“There is a major investor who is willing to invest in the project from $120 million to $150 million,” said an unidentified source close to the negotiation process cited by Betting Business Russia.
