HONG KONG--(BUSINESS WIRE)--Asia Entertainment & Resources Ltd. ("AERL") (NASDAQ: AERL), 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 2011 at the company's VIP rooms in Macau was a record US$2.213 billion, up 154% year-over-year compared to US$871 million for the month of July 2010.
This compares with a year-over-year increase in gross gaming revenue for Macau of 48% for July 2011. AERL's Rolling Chip Turnover increased 47% sequentially from June to July while gross gaming revenue for Macau increased 16% for the same period; for the first seven months of 2011, AERL's Rolling Chip Turnover was US$10.618 billion (an average of $1.517 billion per month), up 104% year-over-year, compared to US$5.213 billion for the first seven months of 2010. By way of comparison, Macau gross gaming revenue increased 45% for the first seven months of 2011.
The exceptional growth in Rolling Chip Turnover was attributable to having five full weekends in July, organic growth, increasing cage capital from the increased line of credit provided by Galaxy Macau and the Venetian Macao-Resort-Hotel allowing for higher levels of Rolling Chip Turnover, the completion of the acquisition of 100% of the profit interest in the operations of King's Gaming Promotion Limited ("KGP"), thereby adding to AERL a VIP room at the Venetian Macao-Resort-Hotel in Cotai and the recent opening of a VIP room at the new Galaxy MacauTM in Cotai.
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 Macau Gaming Inspection and Coordination Bureau (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.
AERL's VIP rooms at the Galaxy Star World in Downtown Macau, Venetian Macao-Resort-Hotel and Galaxy MacauTM in Cotai are based on a fixed commission. Because all of AERL's revenues are 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 rooms. 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. AERL's net profit before general and administrative expenses is approximately 0.45% of the Rolling Chip Turnover.
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 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 Asia Gaming & Resort Limited ("AGRL") on February 2, 2010. AERL is an investment holding company which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, and is entitled to receive all of the profits of the VIP gaming promoters from VIP gaming rooms. AERL's VIP room gaming promoters currently participate in the promotion of three major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world. One VIP gaming room is located at the top-tier 5-star hotel, the Star World Hotel & Casino in downtown Macau, and another is located in the luxury 5-star hotel, the Galaxy MacauTM Resort in Cotai, each of which is operated by Galaxy Casino, S.A. The third VIP gaming room is located at the Venetian Macao-Resort-Hotel in Cotai.
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.
Contacts
Asia Entertainment & Resources Ltd.
James Preissler, 646-450-8808
preissj@aerlf.com
or
ICR
William Schmitt, 203-682-8294
william.schmitt@icrinc.com