The Tigre de Cristal casino resort (pictured) in the Russian Far East will be adding more VIP gaming tables as part of a planned expansion, confirmed Eric Landheer, an executive director of its promoter Summit Ascent Holdings Ltd, in comments to GGRAsia. Investment in the second phase of the property will be kept in the range of US$400 million to US$500 million, he added.
Mr Landheer was speaking on the sidelines of the Global Gaming Expo (G2E) 2019, a casino industry trade show in Macau. Hong Kong-listed Summit Ascent is the vehicle for investment in the Tigre de Cristal, currently the only casino property in operation in the Primorye Integrated Entertainment Zone, a casino development area located 50 kilometres (31 miles) from Russia’s Pacific port of Vladivostok. The venue has been targeting players from neighbouring China and other markets in East Asia.
Last month, Suncity Group Holdings Ltd – a company also quoted on the Hong Kong bourse – 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.
Mr Landheer told GGRAsia that the Suncity brand was expected to contribute to a planned phase two for Tigre de Cristal. “We are now deciding if we first move forward with the previously-announced villas or if we begin the full construction of Phase 2A,” he explained.
The executive said Phase 2A has an estimated cost of about US$200 million. It will add 350 hotel rooms, an indoor beach club, restaurants, shops and a multi-purpose venue for conventions and exhibitions. The expansion will also feature a new gaming area, featuring 50 additional VIP gaming tables, 25 mass-market tables and 300 slot machines.
Investment in Phase 2B will be in the range of US$200 million to US$300 million. “It will be an all-suite hotel, with 150 rooms, catering to the high-end premium and VIP customers,” said Mr Landheer. “We are looking at somewhere between US$400 million to US$500 million for the second phase of our property,” he added.
Mr Landheer hinted at a delay to the phase-two timetable, as the company considers moving forward with the full construction of Phase 2A, and with “Suncity having significant input into the design, construction and the management”.
“The first stage of phase two is expected to be ready by late 2021 or early 2022; we are still working on the timeline for the second stage,” the executive told GGRAsia.
Brokerage Union Gaming Securities Asia Ltd suggested in a recent note that Tigre de Cristal could be 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. The brokerage said the 250-percent growth in VIP gaming volume expected in 2020 was due to the new ownership structure at Summit Ascent
In his comments to GGRAsia, Mr Landheer said that Tigre de Cristal would be “moving up in the value chain in terms of VIP”, as the property “enhances its offering, which will likely provide a higher yield”.
The executive said additionally that the company does not expect a “direct impact” on its existing junket operations. “In the long term, our biggest shareholder [Suncity] will look into how the VIP operations are run and tweak where necessary in order to maximise the business,” said Mr Landheer.
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"We forecast Grand Lisboa Palace will have EBITDA of HKD2.0 billion (US$260 million) with 330 tables by 2022, and HKD3.5 billion with 380 tables by 2023"
Credit rating agency Fitch Ratings