Saturday, May 25, 2024 - Login

Summit Ascent gets downgrade over tax hike: Union Gaming


Gaming brokerage firm Union Gaming says it is downgrading its view of Summit Ascent Holdings due to the recent news of a two-fold increase in gaming taxes in Russia.

Should the new bill be passed, Union Gaming says it would have an HK$11 million impact on its 2018 EBITDA estimate for the group.

There is also further speculation that tax rates could be adjusted even higher post-2018.

Added to this, the brokerage noted that the threat of illegal competing venues remain in Vladivostok, and if left unchecked, will continue to capture the vast majority of locals-oriented GGR.

“Should no further enforcement occur this could effectively flatline mass/slots GGR on a go-forward basis, and, when combined with a potential doubling of taxes, is likely to delay future phases and the developments of the other licensees,” said Union Gaming.

If this occurs, Summit may opt to “slow-play” the development of Phase 2, which is currently expected to come online in 19H2.

“Without the positive effects of concentration, a single asset in a jurisdiction like Primorsky will not enjoy the same levels of GGR growth seen in other regional jurisdictions (e.g. Macau, Philippines, Cambodia).”

Union Gaming says it has downgraded shares of the company to Hold.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

Contact us

ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264

Asia Gaming Brief