MOSCOW: Summit Ascent Holdings Ltd has warned its shareholders of possible changes to gaming tax rates in Russia, which have the potential to hurt the casino operstor’s bottom line.
Hong Kong-listed Summit Ascent – headed by casino investor Lawrence Ho Yau Lung – is the lead developer of the Tigre de Cristal casino resort (pictured) in the Primorye casino development area, near Vladivostok in Russia. Phase one of the resort opened in autumn 2015. Tigre de Cristal is currently the only casino property in operation in Primorye.
“The [Russian] federal government has recently submitted a draft bill to the State Duma [national parliament] proposing an increase to the range of tax rates,” Summit Ascent said in a Tuesday filing. It did not mention when the proposal had been submitted.
The filing added that the Russian authorities were aiming to raise the monthly levy per gaming table to a minimum of RUB50,000 (US$843) and a maximum of RUB250,000. The current levy range varies from RUB25,000 to RUB125,000.
Unlike in Macau or the Philippines, gaming tax in Russia is not levied based on a percentage of gaming revenue. The country charges casinos a monthly fixed levy on each gaming device – gaming table or gaming machine – in operation.
Gaming taxes are payable to the local governments. “Instead of dictating a specific tax charge which has to be levied, the tax code of the Russian Federation stipulates a range within which local governments may choose to levy monthly tax,” Summit Ascent explained in its filing.
The new draft bill aims also to raise the levy for gaming machines, from a current range of RUB1,500 to RUB7,500, to one of RUB3,000 to RUB15,000, the company said. Summit Ascent stated that a second reading of the draft bill in the State Duma was scheduled for Friday. The company added that the proposal would still need to pass a third – and final – reading in the State Duma and then be approved and signed off by President Vladimir Putin before being enacted.
“Therefore, it is too early for the board of directors of the company to predict whether the above proposed changes will become legally enforceable,” Summit Ascent wrote in the filing.
