Asia Entertainment & Resources Ltd. Announces Rolling Chip Turnover Of US$1.47 Billion For October 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
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 October 2012 at the company’s VIP rooms in Macau was US$1.47 billion, down 31% year-over-year, compared to US$2.11 billion for the month of October 2011. This compares with a year-over-year increase in overall gross gaming revenue for Macau of 3% for October 2012, while Macau VIP revenue growth for the month of October 2012 is believed to be negative versus the same period in 2011. Win rate for the month of October 2012 was 4.25%. At a normalized win rate between 2.85 and 3.00%, AERL’s Rolling Chip Turnover for October 2012 could have been between US$2.19 billion and US$2.08 billion. For the first ten months of 2012, AERL’s Rolling Chip Turnover was US$15.57 billion (an average of $1.56 billion per month), down 5.5% year-over-year, compared to US$16.47 billion (an average of $1.65 billion per month) for the first ten months of 2011. Overall, Macau gross gaming revenue increased 13.5% for the first ten months of 2012. The decline in Rolling Chip Turnover was attributable to the Company’s self-directed tightening of credit to agents due to the slowing economy in China, partially offset by a higher-than-average win rate as all AERL VIP rooms are now on a revenue sharing model. 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.