Asia Entertainment & Resources Ltd. Announces 14% Increase In Rolling Chip Turnover To US$1.559 Billion For May 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 May 2012 at the company’s three VIP rooms in Macau was US$1.559 billion, up 14% year-over-year, compared to US$1.362 billion for the month of May 2011. This compares with a year-over-year increase in overall gross gaming revenue for Macau of 7% for May 2012.
For the first five months of 2012, AERL’s Rolling Chip Turnover was US$8.701 billion (an average of $1.740 billion per month), up 26% year-over-year, compared to US$6.902 billion (an average of $1.380 billion per month) for the first five months of 2011. AERL’s growth of 26% year-over-year to date compares favorably to an overall low-teens Macau VIP growth rate during the first five months of 2012. Overall, Macau gross gaming revenue increased 21% for the first five months of 2012.
The growth in Rolling Chip Turnover was attributable to organic growth and increasing cage capital from retained earnings.
“Although May was a slow month in Macau, we were pleased to once again outpace overall Macau revenue growth,” said AERL Chairman Lam. “We are hopeful that Rolling Chip Turnover growth will pick up during the upcoming months.”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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