The first casino to open in Russia’s far eastern Primorye gaming zone says it’s encouraged by its performance to date and expects even greater returns when it hits its operational stride this summer.
On Friday, Summit Ascent Holdings filed its 2015 results with the Hong Kong stock exchange, citing a net loss of HKD 85.4m (US $11m) for the year. The Lawrence Ho-controlled company, which holds a majority stake in the Tigre de Cristal casino outside Vladivostok, credited the loss to costs associated with the casino’s official launch in November.
Summit Ascent claimed the casino’s “consistent month-to-month improvements have been encouraging” and the company expects to be “running at close to optimal levels on a ramped-up basis” by some point this summer.
Tigre de Cristal’s VIP turnover improved from HKD 258m ($33.3m) in November to HKD 382m ($49.3m) in February (the latter figure unaudited). The casino featured between eight and 10 VIP tables during this period.
The casino plans to ramp up its VIP business through the use of “casual” junket operators for a little while longer in order to “preserve the bargaining power of the casino” before it authorizes “fixed room operators” starting around May.
Monthly table drop at Tigre de Cristal’s roughly two dozen mass market tables has fluctuated from RUB 278m ($4.1m) to RUB 448m ($6.6m). The company called this performance “satisfactory” given its inability to “legally advertise casinos in all of our target feeder markets.”
The company also blamed some of mass sluggishness on seasonality, as the onset of the Russian winter deterred some organized tour groups from China from making the trek north. Of the mass market visitors who weren’t put off by the sub-zero temperatures, around half were “non-Russian (predominantly Asian).”
On the plus side, handle from Tigre de Cristal’s 321 slot machines has grown from RUB 778m in its first full month of operation to RUB 1.06b in February. The company notes that the slots market is “primarily a local market,” and since local residents are made of sterner stuff when it comes to temperatures, the casino remains “upbeat” on its future slots performance.
Summit Ascent also addressed talk of Russia imposing a new tenfold increase in gaming tax, saying none of the rumors had been substantiated (yet). Part of the Primorye gaming zone’s appeal has been its absurdly low tax regime – a per table/machine levy that works out to an effective rate of less than 1% — and the company believes any increase would run counter to the zone’s goal of attracting further foreign investment.
Summit Ascent said it hopes to begin construction of Tigre de Cristal’s Phase II in “late 2016” with an eye toward opening in late 2018. The second phase will dramatically expand the project by adding two hotels, 100 VIP tables, 500 slots, a golf course and a bevy of retail, dining, entertainment and MICE facilities.
