Asia Entertainment & Resources Ltd. Announces Rolling Chip Turnover for July 2010
11 8월 2010 - 10:27PM
Business Wire
Asia Entertainment & Resources Ltd. (“AERL”) (NASDAQ: AERL)
(NASDAQ: AERLW), which operates through its subsidiaries and
related promoter companies as a VIP room gaming promoter, today
announced unaudited Rolling Chip Turnover (as defined below) for
the month of July 2010. Rolling Chip Turnover for the month of July
2010 in Macau was US$871 million, up 113% year-over-year, compared
to US$409 million for the month of July 2009. Rolling Chip Turnover
for the first 7 months of 2010 in Macau was US$5.212 billion, up
150% year-over-year, compared to US$2.081 billion for the first 7
months of 2009.
The Company’s VIP rooms are primarily focused on high stakes
baccarat. Baccarat accounts for approximately 88% of total Macau
casino winnings according to the DICJ. In Macau, two remuneration
methods are used to compensate VIP room gaming promoters. On a
fixed commission basis, VIP room gaming promoter revenues are based
on an agreed percentage of Rolling Chip Turnover. On a win/loss
split basis, the VIP room gaming promoter receives an agreed
percentage of the “win” in the VIP gaming room (plus certain
incentive allowances), and is required to also bear the same
percentage of losses that might be incurred. Compared to the fixed
commission basis, the win/loss split basis subjects the VIP room
gaming promoter to the risk of losses from the gaming patron’s
activity and greater volatility.
In first 7 months of 2009, all of AERL’s business was on a
win/loss split model. However, to reduce the risks of losses and
volatility, in the last quarter of 2009, AERL successfully
transitioned the VIP room in the Galaxy Star World in Downtown
Macau to a fixed 1.25% commission on Rolling Chip Turnover. During
the first 7 months of 2010, the majority of AERL’s business was on
a fixed commission basis. The VIP room at the MGM Grand Hotel and
Casino continues to operate at approximately a 43% (including
certain incentive allowances) win/loss split basis. At this rate,
and assuming a win rate (the percentage that a casino’s win is of
the total amount bet) of 2.9%, AERL would have the same revenues at
the MGM Grand Hotel as if it operated under a 1.25% fixed
commission basis. However, if the win rate was over 2.9%, AERL
would have more revenues than if it operated on the 1.25% fixed
commission basis. Because the larger part of AERL’s revenues is now
directly related to Rolling Chip Turnover, the Company is
concentrating its marketing efforts to increase the number of
patrons and the amount of play at its VIP gaming room that operates
under the 1.25% fixed commission basis. Consequently, in order to
increase the Rolling Chip Turnover, the Company reinvests its
earnings to increase the amount of cage capital available to
finance the increased patron activity. Based on a statistical
average of 3.00%, AERL’s net profit before general and
administrative expenses is typically 0.45% of the Rolling Chip
Turnover.
Under the win/loss split model, AERL’s VIP gaming promoters’
gross win rate as a percentage of Rolling Chip Turnover has
historically ranged between approximately 1.1% and 4.5%. The
industry average gross win rate for Baccarat is approximately 2.85%
to 3.00%. Theoretical win rates for AERL’s VIP gaming promoters’
VIP gaming room operations depend on a variety of factors, some
beyond their control. The gaming industry is characterized by an
element of chance. In addition to the element of chance,
theoretical win rates are also affected by other factors, including
gaming patrons’ skill and experience, the mix of games played, the
financial resources of gaming patrons, the spread of table limits,
the volume of bets placed by AERL’s VIP gaming promoters’ gaming
patrons and the amount of time gaming patrons spend on gambling —
thus VIP gaming rooms’ actual win rates may differ greatly over
short time periods, such as from quarter to quarter, and could
cause quarterly results to be volatile. These factors, alone or in
combination, have the potential to negatively impact the VIP gaming
rooms’ win rates.
Definition of Rolling Chip Turnover
Rolling Chip Turnover is used by casinos to measure the volume
of VIP business transacted and represents the aggregate amount of
bets players make. Bets are wagered with "non-negotiable chips” and
winning bets are paid out by casinos in so-called "cash” chips.
"Non-negotiable chips” are specifically designed for VIP players to
allow casinos to calculate the commission payable to VIP room
gaming promoters. Commissions are paid based on the total amount of
"non-negotiable chips” purchased by each player. VIP room gaming
promoters therefore require the players to "roll,” from time to
time, their "cash chips” into "non-negotiable” chips for further
betting so that they may receive their commissions (hence the term
"Rolling Chip Turnover”). Through the promoters, "non-negotiable
chips” can be converted back into cash at any time. Betting using
rolling chips, as opposed to using cash chips, is also used by the
DICJ (Macau Gaming Control Board) to distinguish between VIP table
revenue and mass market table revenue.
About Asia Entertainment & Resources Ltd.
AERL, formerly known as CS China Acquisition Corp., acquired
AGRL on February 2, 2010. AGRL is an investment holding company of
subsidiaries that, through profit interest agreements with
affiliated companies known as VIP gaming promoters, are entitled to
receive all of the profits of the VIP gaming promoters from VIP
gaming rooms. AGRL’s VIP room gaming promoters currently
participate in the promotion of two major luxury VIP gaming
facilities in Macau, China, the largest gaming market in the world.
One of the VIP gaming rooms is located at the top-tier MGM Grand
Macau Casino in downtown Macau that is operated by the MGM Grand
Paradise S.A. The other Macau VIP gaming facility is located in the
luxury 5-star hotel, the Star World Hotel & Casino in downtown
Macau that is operated by Galaxy Casino, S.A.
Forward Looking Statements
This press release includes forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties.
Forward looking statements are statements that are not historical
facts. Such forward-looking statements, based upon the current
beliefs and expectations of AERL's management, are subject to risks
and uncertainties, which could cause actual results to differ from
the forward looking statements.
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