The Tigre de Cristal casino resort (pictured) in Russia is on track to record VIP gaming volume next year of HKD59.7 billion (US$7.61 billion), up from a forecast HKD17.2 billion this year, with the venue’s recently-strengthened link to Macau junket brand Suncity a factor.
So said Union Gaming Securities Asia Ltd as part of its forecast for the casino, a venue near the Russian Pacific port of Vladivostok, and which is promoted by Summit Ascent Holdings Ltd.
The brokerage maintained its forecast of Tigre de Cristal VIP volume at HKD17.2 billion for this year, but says next year could see growth of up to 250 percent under a new ownership structure at Summit Ascent. The revised estimate is for a gross VIP volume increase of HKD42.5 billion – or US$5.4 billion – between this year and next.
“VIP volume will increase much more significantly than had been anticipated,” Union Gaming said in a note on Hong Kong-listed Summit Ascent, issued on Monday.
One reason is the increase in the stake held in Summit Ascent by Hong Kong-listed Suncity Group Holdings Ltd. Last month, Suncity Group Holdings said it had increased its interest in the stock of Summit Ascent to about 27.97 percent.
Suncity Group Holdings is controlled by Alvin Chau Cheok Wa, boss of privately-held Suncity Group. Some investment analysts say that junket brand is the largest-single contributor to VIP volume in the Macau gaming market.
“Suncity [Group Holdings] has taken a material ownership stake in the company [Summit Ascent] and we expect the VIP volume story at Summit Ascent’s Tigre de Cristal to grow by nearly 250 percent next year (with notable upside risk based on the amount of volume Suncity has at its disposal),” the brokerage stated.
“Our previous estimates had already reflected a notable increase in VIP volume in 2020, which was based primarily on what was then a small equity stake held by Suncity [Group Holdings]. With Suncity’s upsized stake giving them real skin in the game, we now expect VIP volume to be significantly higher,” the Union Gaming note says.
“To put the absolute 2019-to-2020 VIP volume increase of HKD42.5 billion in perspective, we believe that Suncity [brand] is already sending more volume than this to its room at an existing casino in Vietnam where it holds no ownership stake,” the note says.
The brokerage says there is room to grow, with the expected increase in 2019-20 VIP volume at Tigre de Cristal representing “90 basis points of Macau’s 2018 VIP volume, or quite literally, a rounding error. As such, we believe notable upside potential to our estimates exists”.
Union Gaming lists 2018 VIP volume generated in some of the other regional casino resorts outside Macau: US$35.7 billion at NagaCorp’s NagaWorld casino complex in Phnom Penh, Cambodia; and US$25.1 billion at Resorts World Sentosa promoted by Genting Singapore Ltd in Singapore.
Like them, Tigre de Cristal targets gamblers from neighbouring mainland China and other places in East Asia.
Earlier in May, Summit Ascent executive director Eric Landheer told GGRAsia: “We believe that Suncity will take an active role in – and have a significant positive impact on – the growth of our VIP business, and that their experience as the premier VIP operator in the world will enable us to enhance our offerings to suit their extensive client base.”
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Tax revenue collected by the Macau government from the city’s gaming industry in the first three months of 2021