In 2015, Tigre de Cristal became the first Russian casino resort in the Primorye integrated entertainment zone (PIEZ) near Vladivostok.
Developed by Melco Resorts and Entertainment, the €158.6m (£133.2m/$172m) resort was to be first in a cluster of 11 casinos planned for the vicinity by 2023. The idea was to create a mini Las Vegas in the Russian Far East.
In a 2012 feasibility study, Global Market Advisors estimated gaming revenues could reach €46.bn within a decade.
But the flagship resort stumbled out of the gate. In 2017, Melco founder and chairman Lawrence Ho divested of his majority share.
Pandemic, war, failed business deal
More speedbumps followed. In 2019, the pandemic temporarily closed the casino and hindered growth in the Russian casino zone. And these days, it’s fallout from Russia’s war with Ukraine that is skewering longer-term plans.
Now LET Group Holdings and subsidiary Summit Ascent Holdings are looking to sell Tigre de Cristal at a bargain price.
In January, LET was close to a deal to sell 100% of its shares in casino operator G1 Entertainment to Russian company Dalnevostochniy Aktiv, for €107. That plan caused an exodus of Summit Ascent board members. Five of the six quit in protest of the proposed sale, leaving only chairman Andrew Lo. Then, in February, the would-be buyer backed out.
On 15 August, Lo will preside over an extraordinary general meeting (EGM) to develop a new sales strategy for the resort.
Wartime sanctions causing angst
According to the Council on Foreign Relations, when Russia first invaded Ukraine in February 2022, the United States “implemented a broad sweep of sanctions” to isolate the superpower and reduce its economic and military heft.
Since then, the US, UK, European Union and other countries including Australia, Canada and Japan have imposed more than 16,500 sanctions on the Russian Bear. Among them: limiting imports and exports, freezing €328.5bn in currency reserves and suspending travel.
LET shareholders are understandably anxious to offload the company’s Russian assets. They complain that holding onto casino operator G1 Entertainment could “bring too many uncertainties and risks.” They say they are at risk of sanctions “on these assets or LET Group and its subsidiaries” by nations that oppose the war.
Two casinos open or in progress in Russian casino zone
In addition to Tigre de Cristal, only one other casino resort is currently open in the PIEZ: Shambala. That resort debuted in 2020. Both resorts have suspended Phase 2 developments.
As of last fall, a third resort project was still in the works from construction and project management firm Asia-Invest Group. But plans by Cambodian operator NagaCorp to join the Primorye casino cluster were tabled after the Ukraine invasion.
Original article: https://igamingbusiness.com/casino/russian-casino-zone-let-selling/
