Asian casino operator Summit Ascent Holdings announced a $200 million expansion of its Russian-integrated resort Tigre de Cristal earlier. Last year, the COVID-19 pandemic and the Russian invasion of Ukraine postponed the development to ‘no earlier than 2025’. The Hong Kong-listed operator has filed a statement overnight to confirm that it may consider seeking ‘strategic local partners’ to operate the Vladivostok – located resort due to extended contingencies around its development.
Inside Asian Gaming reports that Summit Ascent released the latest project update following the last year’s suspension of Phase 2 of the Tigre de Cristal expansion project. In March 2022, the operator declared that ‘the continual negative impact of the coronavirus pandemic, particularly restrictions on international travel’ as well as the ‘aggressively escalating economic sanctions’ against Russia upon its invasion of Ukraine generated uncertainty regarding the 121-room property in the Primorye Integrated Entertainment Resort zone.
Focusing on Local Market to Generate Profit:
Although the political situation hasn’t changed over the last 12 months, the Asian casino company managed to generate a profit of around $1.5 million in 2022 due to its post-COVID focus on the local Russian market. But the contingencies around the expansion project remained the same and the company has been forced to consider other forms to proceed and stay in line with its risk management policies.
For this reason, the Hong Kong-listed casino operator reportedly stated that it has been exploring “alternative options, as well as potentially looking for strategic local partners who might be able to bring in value in terms of operating the integrated resort in the Russian Far East.” The company considers it a viable option for it has already developed strong ties with the local community in 2022 by sourcing catering and other items that helped it tailor the marketing strategy to the local requirements.
Contingencies Impacting Corporate Strategy:
Summit Ascent reportedly stated: “Tigre de Cristal recognized the importance of local customers and will continue to build strong relationships with the local community, such as fully supporting local businesses by sourcing from them, organizing well-loved local events for Russians, and working towards becoming an active and engaged member of the local community.” As a result, the operator’s 2022 gross gaming revenue was 40% higher than in 2021 and amounted to $51.2 million.
The Tigre de Cristal facility opened in 2015 nearby Vladivostok at the cost of $175 million. The resort features 77,500 square feet of casino space with 300 slot machines and ten gaming tables. In 2022, the total mass table turnover grew by 46 percent while electronic gaming machines recorded a 39 percent larger handle than the previous year. Therefore the adjusted 2022 EBITDA amounted to $13.4 million beating the adjusted 2021 EBITDA of $5.2 million.
Overall Growth Brings Optimism:
“Overall, we are pleased to witness a full recovery in the local mass table and electronic gaming businesses in 2022. The performance in 2022 has been impressive, given that massive changes in the business environment have evolved, which made operating an integrated resort nothing comparable to the pre-COVID era,” stated the company.
The operator has postponed the property development due to the long-lasting surrounding insecurities and considers seeking a local strategic partner to run the Vladivostok property for risk management purposes. However, the promising 2022 financial results may impact the final Summit Ascent’s decision about the future of Tigre de Cristal again.