Entertainment Gaming Asia Inc. (NYSE Amex: EGT) (“Entertainment Gaming Asia” or “the Company”), a leading provider of electronic gaming machines on a participation basis to the Pan-Asian gaming industry, today announced it has amended the terms of its casino development project in the Pailin Province of Cambodia (the “Pailin Project”), which include an increase in the Company’s share of the project’s returns. On May 16, 2011, the Company announced its plans to develop and operate a new casino in the Pailin Province of Cambodia near the Thailand border. This casino, which will be named Dreamworld Casino Pailin, is initially intended to include approximately 23 table games and 40 electronic gaming machine seats.
Under the amended terms, the Pailin Project will be 100% owned by Entertainment Gaming Asia with exclusive management rights and control over the development and operation of the casino. In addition, the Company has entered into a 20-year lease agreement for the land on which to construct the initial phase of the project. It will make fixed lease payments to the land owner in the amount of $5,000 per month with the first year of lease payments waived. The Company also has a first right to lease the adjacent land, which is intended to house additional project phases including expanded casino operations and complementary facilities such as hotel rooms, a spa and other entertainment amenities, at a rate of $25,000 per month. This adjacent land is currently occupied by a third party whose lease expires in the second half of 2016. In consideration for the revised ownership structure and new lease agreement, the Company and the land owner will now share in the profit before depreciation and lease payments on a respective 80%/ 20% basis.
Under the prior terms, the Pailin Project was to be owned by a joint venture company, the shareholders of which were the Company and the said land owner. The land owner was to lease to the joint venture company the land for the initial project phase for a period of 20 years for an annual fee of $1 and the Company and the land owner were to share in the cash flow generated from the operations on a respective 55%/45% basis.