Asia Entertainment & Resources Ltd. Announces 36% Increase In Rolling Chip Turnover To US$1.767 Billion For March 2012
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 March 2012 at the company’s three VIP rooms in Macau was US$1.767 billion, up 36% year-over-year, compared to US$1.300 billion for the month of March 2011. This compares with a year-over-year increase in gross gaming revenue for Macau of 24% for March 2012.
For the first three months of 2012, AERL’s Rolling Chip Turnover was US$5.384 billion (an average of $1.795 billion per month), up 32% year-over-year, compared to US$4.076 billion (an average of $1.359 billion per month) for the first three months of 2011. Macau gross gaming revenue increased 27% for the first three months of 2012.
The growth in Rolling Chip Turnover was attributable to organic growth, increasing cage capital from retained earnings and the May 2011 opening of a VIP room at the new Galaxy Macau ™ in Cotai.
“We are pleased with our March results with 36% year-over-year growth, as we significantly outperformed Macau industry growth of 24% on an overall basis, and despite a higher than normal 3.54% win rate (average normal win rate is 2.85-3.00%), which effectively could reduce our Rolling Chip Turnover,” said AERL Chairman Lam. “If the win rate for March were normalized at 2.85%-3.00%, our Rolling Chip Turnover could have been between US$2.196-US$2.087 billion. Play volumes continue to be strong in our VIP rooms and we continue to expect double-digit growth in Rolling Chip Turnover for 2012.”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.
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