Entertainment Gaming Asia Announces Plans to Develop and Operate a Slot Hall in Poipet Near the Cambodia-Thailand Border
April 02 2012 - 8:30AM
Business Wire
Entertainment Gaming Asia Inc. (NYSE Amex: EGT) (“Entertainment
Gaming Asia” or “the Company”), a leading provider of electronic
gaming machines on a participation basis to the Pan-Asian gaming
industry, today announced plans to develop and operate a slot hall
as part of an existing popular casino in Poipet, Cambodia near the
Thailand border (the “Poipet Project”). This project is expected to
contribute to near-term earnings and deepen the Company’s footprint
in this attractive gaming market within the Indo-China region.
The Poipet Project will be constructed as an extension of an
existing casino owned by a local Cambodian company and will connect
to the main casino’s table game floor. The slot hall will operate
under the casino owner’s gaming license and will be branded using
the Company’s “Dreamworld” name. It is expected to measure
approximately 12,000 square feet (1,100 square meters) and house
300 electronic gaming machine seats. It will also feature
entertainment and food and beverage offerings. The slot hall is
expected to open in December 2012, subject to the timely issuance
of the required construction permits.
Located within Cambodia’s Economic Free Zone and at the junction
of an important trade route connecting Bangkok and Phnom Penh,
Poipet is Cambodia’s most significant border crossing with Thailand
(approximately two and one-half hours from Bangkok by car) and an
established and growing gaming market. There are currently eight
existing casinos in Poipet serving customers from major nearby
cities in the area and there is limited real estate for future
gaming development. The Poipet Project will be located in a very
prominent location and will cater to mass market and premium
players.
Under the terms of the agreement, the Company will fund the
development, construction and operation of the slot hall. The
Company and casino owner will share the daily net win generated by
the gaming machines in the Company’s slot hall and certain
operating costs in the ratio of 40% and 60%, respectively. The
initial project term is five years beginning from the commercial
launch of the slot hall. During this initial five-year period, the
Company will have exclusive rights to manage and operate the slot
hall. After the initial period, the Company will have an option to
renew the project for an additional five years and during the
renewal, the Company will continue to enjoy the exclusive rights
over the management and operation of the slot hall subject to the
achievement of certain financial milestones during the initial
period.
Capital expenditures for the Poipet Project, which principally
include the development and construction of the facility and gaming
equipment, are projected to be approximately $7.5 million. The
Company intends to use not more than $5.0 million of the $7.5
million to source top of the line gaming machines in order to
enhance its competitive edge. It is expected that this will
primarily be done through the purchase of new and used machines as
well as machines from its inventory. The capital expenditures for
the slot hall will be funded by the Company's internal cash
resources.
Clarence Chung, Chairman and Chief Executive Officer of
Entertainment Gaming Asia, commented, “We are making solid progress
in expanding our gaming operations in emerging and growing gaming
markets in the Indo-China region. This strategic new project in the
desirable Poipet market near the Thailand border offers attractive
potential returns and expands our footprint and awareness of the
“Dreamworld” brand in our target markets. We believe that our
expertise in operating slot halls, planned marketing efforts, and
focus on providing high-quality machines and superior customer
service will afford us the opportunity to garner a meaningful share
of this attractive market.”
About Entertainment Gaming Asia Inc.
Entertainment Gaming Asia Inc. (NYSE Amex: EGT) is a leading
provider of electronic gaming machines on a participation basis to
the Pan-Asian gaming industry. The Company secures long-term
contracts to provide electronic gaming machines and related systems
to premier hotels and other well-located gaming venues in Asia. The
Company retains ownership of the gaming machines and systems and
receives recurring daily or monthly fees based on an agreed upon
percentage of the net gaming win per machine and provides on-site
maintenance. The Company is also engaged in the development of
casinos in the Indo-China region where it intends to own and
operate casino resorts under the “Dreamworld” brand. For more
information please visit www.EGT-Group.com.
Forward Looking Statements
This press release contains forward-looking
statements concerning Entertainment Gaming Asia within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Those forward-looking statements include statements regarding
expectations for the timeline and working capital requirements for
the Poipet project, the near-term earnings of the Poipet project,
the Company’s ability to meet certain financial milestones to renew
the Poipet project contract after the initial five-year period,
growth of the gaming industry in the Indo-China region, and the
Company’s ability to secure new gaming projects and fund those
projects. Such statements are subject to certain risks and
uncertainties, and actual circumstances, events or results may
differ materially from those projected in such forward-looking
statements. Factors that could cause or contribute to differences
include, but are not limited to, risks related to Entertainment
Gaming Asia’s ability to place gaming machines at significant
levels and generate the expected amount of net win from the gaming
machines placed, obtain the building permits for the Poipet project
on a timely basis or at all, complete construction and development
of the Poipet project on budget and in a timely manner, identify
and successfully develop additional gaming projects in the
Indo-China region, acquire additional capital as and when needed,
adverse weather conditions that cause delays to the project
timeline and those other risks set forth in Entertainment Gaming
Asia’s annual report on Form 10-K for the year ended December 31,
2011 filed with the SEC on March 30, 2012 and subsequently filed
quarterly reports on Form 10-Q. Entertainment Gaming Asia cautions
readers not to place undue reliance on any forward-looking
statements. Entertainment Gaming Asia does not undertake, and
specifically disclaims any obligation to update or revise such
statements to reflect new circumstances or unanticipated events as
they occur.
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