LET Group Holdings Announce Decision to Sell Tigre de Cristal Casino in Russia
LET Group Holdings is set to hold a shareholder meeting next month to discuss the sale of its Tigre de Cristal resort in Russia.
LET Group Holdings plans to sell Russian casino amid potential sanctions.
LISTEN TO THIS ARTICLE:The company is worried about the impact of sanctions related to the Ukraine conflict. Established in 2015, Tigre de Cristal was the first casino resort in Russia’s Primorye integrated entertainment zone (PIEZ) near Vladivostok. Developed by Melco Resorts and Entertainment, the €158.6 million project was intended to be the first of 11 casinos planned for the area by 2023, aiming to create a mini Las Vegas in the Russian Far East.
Project Beset by Problems from Day 1
A 2012 feasibility study by Global Market Advisors projected gaming revenues could hit €46 billion within ten years. However, the resort faced challenges early on. In 2017, son of famous billionaire Stanley Ho and Melco chairman, Lawrence Ho, sold his majority stake.
The resort encountered more obstacles. The pandemic forced the casino to close temporarily in 2019, stalling growth in the Russian casino zone. Now, ongoing issues from Russia’s war with Ukraine are further complicating plans.
LET Group Holdings, along with its subsidiary Summit Ascent Holdings, is now looking to sell Tigre de Cristal at a reduced price. In January, LET nearly finalized a deal to sell 100% of its shares in casino operator G1 Entertainment to Russian company Dalnevostochniy Aktiv for €107 million. This proposed sale led to five out of six Summit Ascent board members resigning in protest, leaving only chairman Andrew Lo. The potential buyer then withdrew from the deal in February.
On August 15, Lo will oversee an extraordinary general meeting (EGM) to develop a new strategy for selling the resort.
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Wartime Sanctions a Cause for Concern
Sanctions related to the Ukraine war are a significant concern. According to the Council on Foreign Relations, the United States implemented sweeping sanctions against Russia in February 2022, aiming to isolate the nation economically and militarily. Since then, the US, UK, European Union, and other countries, including Australia, Canada, and Japan, have imposed over 16,500 sanctions on Russia, affecting imports, exports, currency reserves, and travel.
LET shareholders are keen to divest the company’s Russian assets. They argue that maintaining ownership of G1 Entertainment could lead to “too many uncertainties and risks.” They fear sanctions “on these assets or LET Group and its subsidiaries” from countries opposing the war.
In the PIEZ, only two casino resorts are operational: Tigre de Cristal and Shambala, which opened in 2020. Both resorts have paused Phase 2 developments. As of last fall, Asia-Invest Group was working on a third resort project, while Cambodian operator NagaCorp postponed its plans to join the Primorye casino cluster following the Ukraine invasion.
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