Our gaming operations are the cornerstone of our operations. As a leading supplier of gaming machines on a participation basis to select markets in the Pan-Asian gaming industry and as a future owner and operator of regional casinos in the Indo-China region,we believe we are well positioned to capitalize on the growth opportunities that exist in our target markets and to enhance our long-term returns.
Gaming Participation: Our primary operations currently consist of purchasing and leasing electronic gaming machines on a revenue sharing (participation) basis to the rapidly growing and emerging gaming markets in Pan Asia. Our strategic presence and focus is on Cambodia, where we brand our operations Dreamworld, and the Philippines. We secure long-term contracts to provide electronic gaming machines and related systems to premier hotels and other well-located gaming venues in Asia. We retain ownership of the gaming machines and systems and receive recurring fees or either a daily or monthly basis based on an agreed upon percentage of the net win per machine and provide on-site maintenance.
Since we began our participation operations in the fall of 2007, we have established a strong strategic presence in our focus markets of Cambodia and the Philippines with a total of over 1,600 electronic gaming machine seats in operation. In many cases, customers manage established facilities in high-trafficked locations and we work closely with the venue operator throughout the planning, development, and operational stages to program a gaming facility that maximizes profitability per visitor and per available square foot. However, where appropriate and permitted, we assume a manager role operating our electronic gaming machines in the venues.
Each venue is uniquely designed and developed to address the specific demographics and market influences of our target customers. We deliver value-added planning services after carefully analyzing each project and we provide a full-suite of gaming technology solutions, including market leading slot machines and systems that offer the highest potential revenue and earnings. We configure typically 100% of the floor in our venues on long-term contracts of five years or more, which ensures that our interests are aligned with the facility owner or operator.
Entertainment Gaming Asia Inc. brings significant competitive advantages to its relationships with venue owners. We have an experienced management team with deep relationships across Asia and a full understanding of the regulatory, political, and social issues in these markets. We have established strong goodwill and relationships in our markets and possess the necessary Pan-Asian infrastructure and operational expertise to ensure regulatory compliance. In addition, we have established important relationships with major gaming equipment suppliers to ensure that we deliver premium gaming products to our customers’ venues.
Casino Development and Operations: Leveraging our market expertise and the “Dreamworld” brand from our gaming machine participation operations, we intend to expand our gaming operations and become an owner and operator of our own regional casinos under our “Dreamworld” brand in select emerging markets in the Indo-China region. This approach allows us the potential for higher long-term incremental returns on our operations given the ability to collect up to 100% of the net win of our gaming stations. In addition, it provides us greater long-term control of our operations.
Currently, we have secured three casino projects in Cambodia. Two of these project are located near the Vietnam border in the provinces of Kampot ("Kampot Project") and Takeo ("Takeo Project"). The third project is located in Pailin ("Pailin Project") near the Thailand border.
The Pailin Project
The Pailin Project will be located on a growing trade route with solid infrastructure between Cambodia and Thailand (approximately four hours from Phnom Penh and three hours from Bangkok by car). It will cater to mass market and premium players from the major nearby cities in the region and will be one of a few existing casinos in the area and the closest to the border checkpoint.
The casino is initially intended to include approximately 23 table games and 40 electronic gaming machine seats. The initial phase of the casino is expected to open in the summer of 2012, subject to the timely issuance of the required construction permits. While the initial phase of the casino will have a footprint of approximately 15,000 square feet, we have the opportunity to lease at a future date the adjacent land to develop additional phases of the project. Such additional phases are intended to include expanded casino operations and complementary facilities such as hotel rooms, a spa and other entertainment amenities, which could expand the footprint of the project to over 170,000 square feet.
The Kampot Project
The Kampot Project will be developed under a joint venture company on over 100,000 square feet of land strategically located near one of southern Cambodia’s busy border crossing checkpoints with Vietnam. One of a few gaming establishments in the area, the casino will cater to visitors from several major metropolitan areas in the region.
The casino is expected to include table games such as baccarat, roulette and dice games as well as electronic gaming machines. The initial phase of the casino is expected to be opened in the first quarter of 2012 with up to 14 table games and 25 electronic gaming machine seats. Subsequent development phases could, depending on market demand, include additional casino floor space and equipment as well as complementary facilities such as hotel rooms, a spa and other entertainment amenities.
The Takeo Project
The Dreamworld Casino and Resort will be strategically positioned on seven acres of land we have purchased near a border crossing station and on the national highway that connects the capital city of Phnom Penh with several major cities in southern Vietnam. The Dreamworld Casino and Resort is expected to cater to visitors and tourists in the area, which includes the capital city of Phnom Penh and several major cities in southern Vietnam with a combined estimated population of approximately 18 million people. In addition, as a further attraction to the area, the casino hotel will be located near an existing duty free trading zone that houses a large shopping facility as well as a famous temple that attracts over one million visitors annually.
The project timeline and development plans for the Takeo Project are currently under review pending the outcome of negotiations of other potential projects in the pipeline, which could offer higher projected short-term returns.
We continue to actively build a pipeline of new potential projects in the region to achieve our growth objectives and our goal of becoming a leading operator of regional casinos in the Indo-China region.
