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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 February 2013 at the company’s VIP rooms in Macau was US$1.29 billion, down 32% year-over-year, compared to US$1.91 billion for the month of February 2012. This compares with a year-over-year increase in overall gross gaming revenue for Macau of 12% for February 2013. Win rate for the month of February 2013 was 3.54%.
For the first two months of 2013, AERL’s Rolling Chip Turnover was US$2.55 billion (an average of $1.28 billion per month), down 29% year-over-year, compared to US$3.62 billion (an average of $1.81 billion per month) for the first two months of 2012. Macau gross gaming revenue increased 9% for the first two months of 2013. Win rate for the first two months of 2013 was 3.89%.
The decline in Rolling Chip Turnover was attributable to the Company’s self-directed tightening of credit to agents due to its conservative view on the Chinese economy.
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.