Asia Entertainment & Resources, Ltd. To Shift Remuneration Model From Fixed Commission To Revenue Sharing
Asia Entertainment & Resources Ltd. (“AERL” or the “Company”) (NASDAQ: AERL), which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, today announced that beginning on September 1, 2012, the Company will be changing its remuneration model to a revenue sharing model for all of its VIP rooms. Currently, all AERL VIP rooms are under a fixed commission model of 1.25% of Rolling Chip Turnover.
By shifting to a revenue sharing model, under normal circumstances, the Company believes it can generate commission of over 1.30% of Rolling Chip Turnover, and in addition, be able to negotiate on additional allowances and other incentives, thus increasing revenue and ultimately, net income. Furthermore, with a revenue sharing model, the shift opens up the potential for AERL to enter into agreements to establish VIP rooms at other casinos in Macau that do not allow for a fixed commission (i.e., MGM, Wynn and SJM).
”Two years ago, we had only US$45 million in cage capital, which made it prudent to enter into a fixed commission remuneration structure to mitigate our risk,” said AERL Chairman Lam. “Today, with over US$260 million in cage capital and with 29 VIP tables in 3 rooms, we believe the greater volatility surrounding a revenue sharing model is significantly reduced, and with our change to a revenue sharing model, we believe it will allow us to increase revenue, eventually would provide greater value to our shareholders and also enable us to negotiate with additional casinos to open up new VIP rooms.”
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 Macau ™ 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.
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