This week, Summit Ascent Holdings filed papers with the Hong Kong Stock Exchange laying out the performance of Tigre de Cristal, the only casino currently operating in the Primorye gaming zone on Russia’s eastern shore, just outside Vladivostok.
Summit Ascent says VIP gambling turnover has “dramatically increased” after striking fixed-room deals with two junket operators. The company had previously relied on casual junket relationships, based on its desire to “preserve the bargaining power” of the casino.
Tigre de Cristal officially opened its doors last November, and recorded HKD 258m ($33.2m) in VIP turnover that month. By June, VIP turnover had nearly tripled. But July’s unaudited figure shows VIP turnover hitting HKD 2b, rising again to HKD 2.2b in the first 30 days of August.
Given the success of their new junket strategy, the casino says it plans to ink a new fixed-room deal with another junket operator in the near future.
On the flip side, Tigre de Cristal’s mass market table business has proven “relatively disappointing.” Mass market table drop peaked at HKD 448m last December and sunk to HKD 303m in August, the second lowest total since the property opened.
Summit Ascent said the casino’s top-30 premium local customers account for around 40% of total mass table drop, and the continuing weakness in Russia’s economy has constrained these players’ activity.
Summit Ascent also said it’s lobbying the Russian government to lift rules prohibiting gamblers from using foreign banknotes to settle gaming wins and losses. The company says the requirement to convert currency to rubles has “discouraged a lot of our Asian customers from making big bets on mass tables.”
Tigre de Cristal’s slot machine business, which primarily caters to local gamblers, has undergone a recent spike in activity. After hovering around HKD 1b for most of the year, June’s slot handle hit HKD 1.4b, while August’s 30-day total came in just under HKD 1.2b.
International visitation to the Primorye region has undergone “explosive growth” this year. Local tourism authorities say the number of Chinese visitors – particularly from northeastern China – from January to July has already exceeded the total for all of 2015. Additional direct flights have since been added from Beijing, Shanghai, Dalian and other key markets.
It remains to be seen whether the Chinese will continue to flock north as the weather changes. In March, Summit Ascent claimed that the prospect of dealing with a Russian winter had deterred many Chinese tour groups from organizing trips to Primorye.
Summit Ascent also announced that it was pushing back the opening of Tigre de Cristal’s second phase, from H2 2018 to H1 2019. In August, Summit Ascent announced it had inked a preliminary agreement with Kangwon Land, South Korea’s largest casino operator, on a possible joint investment on the second phase.
Summit Ascent holds a majority stake in Tigre de Cristal’s operating company, G1 Entertainment. Melco Crown Entertainment CEO Lawrence Ho is the majority stakeholder in Summit Ascent. Taiwanese gaming device maker Firich Entertainment is a minority partner in G1, along with local Russian entities.