Earlier today, Daiwa Securities Group Inc. announced in a special note that Summit Ascent Holdings Ltd., a gambling operator owned by Hong Kong businessman Lawrence Ho, is planning to complete its hotel and casino venue near Vladivostok, Russia by the end of the second quarter of 2015.
Analysts Adrian Chan and Jamie Soo wrote in a special note that once the property is completed, it will be subject to a thorough government inspection, which is expected to take up to five weeks. Then, the casino will be ready to open doors for its visitors.
Mr. Ho’s project is part of the so-called Primorye Integrated Entertainment Zone, located not far from Vladivostok. The hotel and casino venue was initially planned to be launched by the end of 2014.
Daiwa’s analysts pointed out that the property is to be called Tigre de Cristal and will be mainly intended for customers from the North Asian market, which is currently considered to be quite underserved. The research house acquired this information during an investors’ roadshow, which took place in Japan last week.
Mr. Chan and Mr. Soo stated in their note that Summit Ascent’s managers shared that the venue’s location can be easily reached by more than 300 million people from China, South Korea, and Japan, who are looking for new opportunities to engage in their favorite casino games.
The analysts also wrote that Summit Ascent expects to generate substantial gaming revenue from Russian players solely.
Back in December 2014, Lawrence Ho was described in a filing as Summit Ascent’s non-executive director. At present, the casino mogul is also chairman of Melco International Development Ltd., which is in possession of a small stake in Oriental Regent Ltd. The latter company, in turn, is considered to be the owner of the Russian project.
It was reported in Daiwa’s note that Summit Ascent is currently in talks with some of China’s major airlines to add more flights to Vladivostok. The Hong Kong-listed company has also approached junket operators to provide charter flights to the city.
Daiwa’s experts believe that the Russian project might turn out to be profitable for Summit Ascent. As Mr. Chan and Mr. Soo wrote in their note, Russia charges a fixed monthly levy per slot and per gaming table, which equals to approximately 1% of the revenue from gambling activities.
Thus, the gambling operator will probably generate higher EBITDA margins as compared to those in Macau. What is more, it will be able to provide junket operators with higher commissions.
Cambodia-based gambling operator NagaCorp Ltd. has also expressed interest in building a casino not far from Vladivostok, which is expected to be completed sometime in 2018.
