HONG KONG--(BUSINESS WIRE)--Asia Entertainment & Resources Ltd. (“AERL”) (OTCBB: AERCF, AERLF), which operates through its subsidiaries as a VIP room gaming promoter, today announced unaudited Rolling Chip Turnover (as defined below) for the first quarter 2010 as well as the month of March 2010. Rolling Chip Turnover for the first quarter of 2010 in our 2 VIP gaming rooms in Macau was US$1.894 billion, up 132% year-over-year, compared to US$817.3 million for the first quarter of 2009. Rolling Chip Turnover for the month of March 2010 in our 2 VIP gaming rooms in Macau was US$496.7 million, up 93% year-over-year, compared to US$257.8 million for the month of March 2009.
AERL, formerly known as CS China Acquisition Corp. (“CS China”), acquired Asia Gaming & Resort Limited (“AGRL”) on February 2, 2010. The principal business activities of AGRL’s wholly owned subsidiaries are to hold Profit Agreements with VIP Room gaming promoter companies ("Promoters") and to receive 100% of the profit streams from the Promoters. The Promoters currently participate in the promotion of two major luxury VIP gaming facilities ("VIP rooms") in Macau, China, the largest gaming market in the world. One of the Macau VIP rooms is located at the top-tier MGM Grand Macau Casino in downtown Macau and is operated by the MGM Grand Paradise S.A. The other Macau VIP gaming facility is operated by Galaxy Casino, S.A. and is located in the luxury 5-star hotel, the Star World Hotel & Casino in downtown Macau. In addition, the Promoters plan to promote the first luxury VIP room in Jeju Island in South Korea, which will offer Macau-style gaming, and have concluded a favorable trial operation there.
The Promoters’ VIP rooms are primarily focused on high stakes baccarat. Baccarat accounts for approximately 88% of total Macau casino winnings. The Promoters’ gross win rate as a percentage of Rolling Chip Turnover has historically ranged between approximately 1.1% and 4.5%. The industry average gross win rate for baccarat is approximately 2.85% to 3.00%. Based on a statistical average of 3.00%, the Promoters’ net profit before general and administrative expenses is typically 0.45% of the Rolling Chip Turnover.
Theoretical win rates for the Promoters’ VIP gaming room operations depend on a variety of factors, some beyond their control. The gaming industry is characterized by an element of chance. In addition to the element of chance, theoretical win rates are also affected by other factors, including gaming patrons’ skill and experience, the mix of games played, the financial resources of gaming patrons, the spread of table limits, the volume of bets placed by the Promoters’ gaming patrons and the amount of time gaming patrons spend on gambling — thus VIP gaming rooms’ actual win rates may differ greatly over short time periods, such as from quarter to quarter, and could cause their quarterly results to be volatile. These factors, alone or in combination, have the potential to negatively impact the VIP gaming rooms’ win rates.
Definition of Rolling Chip Turnover
Rolling Chip Turnover is used by casinos to measure the volume of VIP business transacted and represents the aggregate amount of bets players make. Bets are wagered with "non-negotiable chips” and winning bets are paid out by casinos in so-called "cash” chips. "Non-negotiable chips” are specifically designed for VIP players to allow casinos to calculate the commission payable to VIP room gaming promoters. Commissions are paid based on the total amount of "non-negotiable chips” purchased by each player. VIP room gaming promoters therefore require the players to "roll,” from time to time, their "cash chips” into "non-negotiable” chips for further betting so that they may receive their commissions (hence the term "Rolling Chip Turnover”). Through the VIP room gaming promoters, "non-negotiable chips” can be converted back into cash at any time. Betting using rolling chips, as opposed to using cash chips, is also used by the DICJ (Macau Gaming Control Board) to distinguish between VIP table revenue and mass market table revenue.
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.