Melco Crown Entertainment Ltd, which runs casinos in Macau and the Philippines, said it would purchase gaming products from Dolphin Products Ltd, a unit of Entertainment Gaming Asia Inc (EGT), for a term of three years commencing January 1, 2015.
The annual caps for each of the three financial years ending December 31, 2017 are US$18 million, US$6 million and US$5 million, respectively, the casino operator said in a filing to the Hong Kong Stock Exchange.
“In light of the expected opening of new casino resorts in the future, the company expects the purchases of gaming products from the Dolphin Products group would increase in the coming years,” it said.
The deals will be done via Melco Crown (Macau) Ltd, which operates the Altira and City of Dreams casinos in Macau, and MCE Leisure (Philippines) Corp, which runs the City of Dreams Manila, a property that had a soft opening on December 14.
The companies have spent US$4.6 million in Dolphin gaming products in the calendar year to November 30, 2014.
Nasdaq-listed EGT operates slot machines on a participation basis and manufactures and distributes gaming chips, gaming plaques and related products to casinos in Asia and Australia under the Dolphin brand. The company became a subsidiary of Melco International Development Ltd following a share sale last month.
Melco International, chaired by Lawrence Ho Yau Lung, is one of the two controlling shareholders of casino operator Melco Crown. The other is Australia’s Crown Resorts Ltd. Mr Ho is also co-chairman and chief executive of Melco Crown.
Under the agreement now announced, Melco Crown Macau will buy Dolphin gaming products worth US$12 million next year. The company is developing its second large-scale casino resort in Cotai, Studio City, expected to open in mid-2015.
MCE Leisure will spend US$6 million in gaming products from Dolphin Products next year. City of Dreams Manila’s grand opening is scheduled for before Chinese New Year in 2015.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China