International edition
September 27, 2020

Down 9% year-over-year

AERL registered Rolling Chip Turnover of us$ 1.365 billion in June

(Hong Kong).- Asia Entertainment & Resources, which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, announced unaudited Rolling Chip Turnover for June 2012 at the firm’s three VIP rooms in Macau was us$ 1.365 billion, down 9% year-over-year, compared to us$ 1.504 billion for the month of June 2011.

T

his compares with a year-over-year increase in overall gross gaming revenue for Macau of 12% for June 2012.

For the first six months of 2012, AERL’s Rolling Chip Turnover was us$ 10.066 billion (an average of us$ 1.678 billion per month), up 20% year-over-year, compared to us$ 8.406 billion (an average of us$ 1.401 billion per month) for the first six months of 2011. Overall, Macau gross gaming revenue increased 20% for the first six months of 2012, while Macau VIP revenue growth for the first six months of 2012 is believed to be in the mid-single digits.

The decline in Rolling Chip Turnover was attributable to a higher-than-expected win rate of 4.08% and lower traffic due to the Euro Cup 2012 soccer tournament, as much of mainland China stays home to watch and wager on the games. At a normalized win rate between 2.85 and 3 %, AERL’s Rolling Chip Turnover for June 2012 could have been between us$ 1.954 billion and us$ 1.856 billion.

“Our June 2012 results were affected both by a higher than normal win rate, as well as the lower VIP visitations due to the popularity of the Euro Cup,” said AERL Chairman Lam. “We expect that we will see stronger Rolling Chip Turnover in July now that the Euro Cup has ended.”

The firm’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.

AERL’s VIP rooms at the Galaxy Star World in Downtown Macau, Venetian Macao-Resort-Hotel and Galaxy Macau in Cotai are based on a fixed commission. Because all of AERL’s revenues are now directly related to Rolling Chip Turnover, the company is concentrating its marketing efforts to increase the number of patrons and the amount of play at its VIP gaming rooms. Consequently, in order to increase the Rolling Chip Turnover, the firm reinvests its earnings to increase the amount of cage capital available to finance the increased patron activity.

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