Inside Asian Gaming

APR 2019 INSIDE ASIAN GAMING 19 T igre de Cristal in the Primorsky Krai Integrated Entertainment Zone outside Vladivostok defines frontier gaming. “We’re in the middle of the forest and it’s just us,” Tigre de Cristal COO Stylianos Tsifetakis says. Yet, since its November 2015 opening, Tigre de Cristal has welcomed nearly one million visitors, formulated ambitious expansion plans to cement its leading role in what it hopes will become a casino cluster on Russia’s Pacific Coast and created associations with two of the biggest names in Macau gaming. In 2013, Summit Ascent’s then-chairman Lawrence Ho signed an agreement with Russian authorities to partner in the first casino resort in the new entertainment district that’s about 50 kilometers (31 miles) from downtown Vladivostok but just 15 minutes from the city’s international airport. Some 300 million consumers live within a three hour flight, including 130 million in under- served northeastern China. Summit Ascent acquired a majority stake in the resort in 2014. Ho sold his stake in Summit Ascent in late 2017. “Only the chairman andmajority shareholder changed,” Tsifetakis, who has spent nearly 25 years in casino and hotel management in Europe, spiced with a stint in Macau, says. “The strategy is the same.” Taiwan’s First Steamship Group, with shipping, retail and property interests, is now Summit Ascent’s largest shareholder. First Steamship Chairman Kuo Jen Hao, a graduate of Taiwan’s Aletheia University and a certified public accountant in New Jersey, now serves as Summit Ascent’s chairman and a non-executive director. SOLAR ENERGY In December, a Hong Kong market filing announced that Macau’s leading junket operator Suncity Group’s listed arm has a 3.29% stake in Summit Ascent, and Since its 2015 opening, Tigre de Cristal has welcomed nearly one million visitors [and] formulated ambitious expansion plans to cement its leading role in what it hopes will become a casino cluster onRussia’s Pacific Coast. that Suncity Executive Director Andrew Lo Kai Bong had become a Summit Ascent director. In its 2018 earnings report filed with the Hong Kong Stock Exchange on 18 March, Summit Ascent wrote, “We are optimistic about the potential collaboration with the Suncity Group.” Andrew Lo tells Inside Asian Gaming the purchase of Summit Ascent shares “is just an investment, as we think its stock undervalued.” However, Lo, who serves as Suncity Group’s chief investment officer and works on overseas business development, mergers and acquisitions, sees scope for cooperation between the companies on the junket side. “Firstly, Vladivostok’s geographical environment is unique, so it will attract some particular players, and our platform needs different types of attractions. It is near to Northeastern China, Korea and Japan. It has sea beaches and is a good summer resort. Secondly, as the profit margin there is higher, we can give more [rewards] to the clients.” Lo adds that Suncity expects to do business with other Primorsky casinos but doesn’t plan to invest in them. DEEPER POOL The link with Suncity fits Summit Ascent’s strategy of diversifying its junket pool beyond North Asian groups that it claims demanded higher commissions. Tigre de Cristal has a base rebate rate of “approximately 70%” of VIP revenue, according to Summit Ascent Executive Director Eric Landheer, with additional incentives for hitting certain rolling chip thresholds. Last year it paid out 77% of VIP gross win as commission, equivalent to 2.4% of rolling chip volume. In Macau, commissions are limited to 1.25% of rolling chip volume and revenue share tends to follow a 40-40- 20 pattern: 40% tax, 40% rebate and 20% to casino, with some 40-50-10 arrangements. At Tigre de Cristal, tax was 3.14% of gaming revenue and was not revenue-based.