Macau VIP Junket King Alvin Chau Increases Stake in Russian Casino Tigre de Cristal
Posted on: November 17, 2020, 10:01h.
Last updated on: November 17, 2020, 12:17h.
Macau billionaire Alvin Chau has increased his stake in the Tigre de Cristal casino resort in Russia’s Far East. Chau did so via his Suncity Group and Summit Ascent Holdings firms.
Summit Ascent announced today in a financial disclosure that it’s increasing its position in Tigre de Cristal from 67.5 percent to 77.5 percent. The companies are buying shares of Oriental Regent Limited which owns and operators the casino resort located in the Primorye gaming zone, some 30 miles north of the port city of Vladivostok.
Summit Ascent is a Hong Kong-listed holdings subsidiary of Chau’s Suncity Group.
Tigre de Cristal was developed and largely financed by Melco Resorts billionaire Lawrence Ho. The casino was the first to open in 2015 in what Russia hoped would become its version of the Las Vegas Strip.
The property has struggled during its first half-decade in operation, which led to Ho selling his stake at a loss.
Alvin Chau is best known for leading Suncity Group, one of the largest VIP junket operators in Macau.
Chau is worth an estimated $2 billion and has been accused of amounting some of his wealth by way of unscrupulous relationships with organized crime. The 46-year-old has long denied these claims and has been on a crusade to become an actual casino owner. He’s gotten that with Tigre de Cristal, and analysts believe it’s a sound investment.
Today’s stake increase from Summit and Suncity into Tigre follows Chau’s decision to pump $160 million into the property in June.
Credit Suisse analysts Kenneth Fong, Lok Kan Chan, and Rebecca Law nearly doubled Chau’s Summit Ascent stock price outlook this week from HK$0.95 (US$0.12) to HK$1.80 (US$0.23).
Summit Ascent will start to build its direct VIP business starting in 2021, with its strong balance sheet as a support,” the analysts explained of their decision. “After a series of investments and increase in stake through a rights issue this year and higher commission over Russia, it makes economic sense for Suncity to bring in more of its business to the casino.”
Chau certainly knows how to bring high-rollers to a casino. And unlike in Macau, where the Chinese Special Administrative Region taxes gross gaming revenue (GGR) at 39 percent, Russia’s casinos are only subjected to a two percent gaming tax.
Competition, Visitors Needed
Tigre de Cristal has endured several struggling years, largely because it’s the only game in town — and that town is in remote Russia. Though Russia planned its version of the Las Vegas Strip back in 2009, the second casino, the $111.5 million Shambala Casino, only opened last month.
Tigre gladly welcomes neighboring casinos, as it’s thought that will lure in more conventions and leisure travelers, and better put the region on the map.
Tigre is amid a $200 million expansion that will add 120 hotel rooms and suites, four restaurants, and an indoor beach club. Along with its VIP segment, Tigre is developing a larger mass gaming area. That is expected to help keep its additional hotel rooms occupied once complete, with the resort’s second phase slated to open in 2022.
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