Inside Asian Gaming

IAG JAPAN APR 2019 26 COVER STORY win up 19% to HK$143 million, also topping VIP revenue. Hotel occupancy nudged up to 63.4% from 62.2% in 2017 – Tsifetakis says guest rooms are regularly full Friday through Monday. Adjusted property EBITDA rose 4% to HK$181 million and EBITDA margin increased three percentage points to 39.2%. In addition to its more profitable business mix, Tigre de Cristal also achieved savings through cost control and localization, with 97% of its 1,050 employees Russian citizens. Focused on second half improvement in VIP roll from HK$6.5 billion to HK$9 billion plus strong mass growth, Union Gaming Managing Director in Macau, Grant Govertsen, upgraded Summit Ascent to a buy. Adding Suncity to the VIP mix suggests to Union that VIP volume could reach HK$30 billion by 2020. END OF THE WORLD Named “Russia’s Leading Resort” by the World Travel Awards last June, Tigre deCristal offers aworld class product in what is often seen as an “end of the world” location. The hotel has 121 rooms in seven categories and if you woke up in one, you’d swear it bore a top Western brand. The five-star property, built for US$172 million, boasts two restaurants, one casual Pan-Asian and Western, one fine dining steakhouse, and four bars, with a private club expected to open soon, plus a handful of shops including a jeweler and a diamond and watch boutique. There’s also a spa, karaoke and virtual golf (and in case one particular driving simulator fan is tempted, a presidential suite). The casino has a total capacity of 58 tables and 333 EGMs, with seven junket rooms. Baccarat is the most popular game as high end customers in particular tend to come from China, with Koreans, Japanese and Russians – allowed to play with no entry fee or visit restrictions – rounding out the daily average of 1,000 casino visitors. Other table games are blackjack, roulette, sic bo and casino poker variants. The betting floor color scheme emphasizes earth tones and has the comfortable feel of an oversize fur coat. LATE NIGHT BANKING Players must navigate some Russian regulatory quirks. For starters, casino guests must register with a passport or Russian national ID to enter. Russia requires that all foreign currency purchases and sales take place at banks, so the casino floor has a bank branch operating 24/7, offering competitive exchange rates, Tsifetakis assures. Tigre de Cristal casino adds its own wrinkle with bets and chips denominated in TDC units, equivalent to RUB60 or roughly US$1. On the main floor, players can squeeze their baccarat with minimum bets starting at 50 TDC. Junkets and select VIPs get short-term credit, generally repaid in less than two weeks following the visit, with no balances beyond that window and no impairments reported. To expand guest capacity, Summit Ascent says it has begun preliminary work to build villas and serviced apartments adjacent to the current resort. The additions will increase the key count by approximately 50%, according to the earnings statement, with completion scheduled early next year. That’s in advance of Tigre de Cristal Phase II, part of the original plan for the resort that’s been under revision with the changes in ownership. According to the earnings filing, Phase II will add hotel and gaming capacity, newF&B choices, an indoor beach club and, in First Steamship’s wheelhouse, a premium outlet mall. Summit Ascent is now targeting opening the first stage by the third quarter of 2021. CLUSTER EFFECT By that time, Summit Ascent expects that Hong Kong listed NagaCorp and Russia’s Diamond Fortune will have opened their Primorsky casinos. Shambala, which ran a casino in the Azov gaming region that was eliminated at the end of last year, also announced plans last June for a Primorsky casino. “We don’t see the other operators as competitors,” Tsifetakis says. “We see them as opportunities for a cluster effect.”