Inside Asian Gaming

IAG JAPAN APR 2019 24 COVER STORY 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. Tax rates are currently set at 125,000 Russian rubles (US$1,943) monthly per table and RUB7,500 monthly per gaming machine position. Summit Ascent recently reported gaming revenue of HK$419 million (US$53.4 million) in 2018 and total operating revenue of HK$463 million, down 1.6% from 2017. That was largely due to a 17% decrease in VIP rolling to HK$15.6 billion and 30% fall in VIP win after rebates to HK$109 million. Those drops came as Tigre de Cristal sought new junket arrangements and focused on beefing up its mass market operations. A weaker ruble also contributed to the overall fall. Mass table play became Tigre de Cristal’s largest revenue source, growing 26% to HK$167 million. Slot handle increased 30% to nearly HK$2.9 billion, with slot Tigre de Cristal COO Stylianos Tsifetakis ティグレデクリスタルのスティリアノス・シファタキスCOO