GGRAsia – Lawrence Ho firm renews slot lease deal with NagaWorld

Lawrence Ho firm renews slot lease deal with NagaWorld

Mar 08, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

Nasdaq-listed gaming supplier Entertainment Gaming Asia Inc is to continue leasing slot machines and related equipment to Cambodian casino NagaWorld (pictured), the firm announced.

A new agreement including the lease of 670 gaming machines – measured on a per seat basis – came into effect on March 1. It replaced a previous 2010 deal that expired on February 29 which also involved the lease of 670 slots, Entertainment Gaming Asia said in a Friday filing.

Casino investor Melco International Development Ltd – a company controlled by Mr Ho – holds approximately 64.84 percent of Entertainment Gaming Asia. Melco International is one of the two controlling shareholders of Asian casino developer Melco Crown Entertainment Ltd.

NagaWorld is owned and managed by Hong Kong-listed NagaCorp Ltd.

Under the new agreement, NagaWorld will pay Entertainment Gaming Asia a fixed fee per machine seat per day.

“The lease payments will be graduated for the first six months of the agreement,” Entertainment Gaming Asia said in its filing.

It added: “From March 1 through May 31, 2016, the lease payments per machine seat per day will be US$22. From June 1 through August 31, 2016, the lease payments will be US$20 per machine seat per day. Beginning September 1, 2016, the lease payments will be US$18 per machine seat per day.”

In the previous contract, Entertainment Gaming Asia was entitled to 25 percent of the leased slot machines’ net win, and NagaCorp the remaining 75 percent.

Under the new deal, Entertainment Gaming Asia “will be responsible to pay the withholding tax and provide on-site machine and system maintenance but will not provide any other operational support staff,” the firm stated in its filing.

There is no expiry date specified in the contract. NagaWorld can terminate the deal at any time, but must give Entertainment Gaming Asia one month’s notice of termination. The latter can also terminate the contract if NagaWorld fails to fulfil its contractual obligations.

Entertainment Gaming Asia posted net income of US$1.4 million for the third quarter of 2015, compared to a net loss of US$261,000 a year earlier.

NagaCorp on Friday said it would ask its shareholders to approve a dual, Chinese, name for the company. The name, in traditional Chinese characters, includes the Cantonese phrase “kam kai”, literally meaning “gold world”. The firm was already using the Chinese name “for identification purposes only”, it said in a filing.