Inside Asian Gaming

inside asian gaming June 2014 42 Official Subsidy Planned for MGS Attendees The Macao Gaming Show says qualified buyers may be eligible to receive government subsidies to cover part of their travel and accommodation costs while attending this year’s event, scheduled for 18th-20th November at The Venetian Macao. The subsidies will be provided by Macau’s Economic Services Office under its Exhibition Stimulation Program, which is designed “to enhance the competitive edge of Macao’s convention and exhibition industry and the marketing of Macao as a successful and vibrant destination city for commerce,” according to a statement from MGS. Marina Wong, general manager and event director for the show, said the level of subsidy has yet to be finalized, but to qualify, attendees must supply MGS with a letter detailing their involvement in the gaming, leisure and hospitality sectors and book their air and ferry tickets and room reservations through EGL Tours. EGT Posts Q1 Net Loss EGT is 38% owned by Lawrence Ho’s Melco Group through a Hong Kong-listed subsidiary, EGT Entertainment Holding. Mr Ho is co-chairman of Macau casino operator Melco Crown Entertainment, of which Melco Group owns 34% Big Tax Cut for Entertainment City’s Licensees REGIONAL BRIEFS Dreamworld Poipet Casino and machine games operator Entertainment Gaming Asia reported a 43.5% drop in pre-tax earnings in the first quarter as trading was down across all the company’s segments. Revenues for Nasdaq-listed EGT, as it’s known, were off 29% to US$4.9 million compared to the first quarter of 2013. Leading the declines was gaming operations, which comprises about 84% of EGT’s business and dropped 25% in the quarter. Slot operations were down 12%, mainly on lower average daily win from the company’s NagaWorld and Philippines slots and EGMs, slightly offset by incremental revenue from the company’s Dreamworld Poipet casino, which opened in Cambodia in May 2013. Casino operations, which consists of Cambodia’s Dreamworld Pailin, contributed $216,000, down from $1.1 million in Q1 2013, which the company attributed to a decision to stop using tour group promoters and to further reduce costs by leasing its table games. Revenue from gaming products was down 43% to $811,000 on lower sales to existing customers. The company posted adjusted EBITDA of US$862,000, down from $1.9 million in Q1 2013, and a net loss of $1 million, or three cents per share. The prior year loss was $2.2 million, but that was due largely to discontinued operations related to the March 2013 sale of the non-gaming businesses of its Dolphin Products subsidiary. Excluding this, the loss from continuing operations in Q1 2013 was $329,000, or one cent per share. The soon-to-open City of Dreams Manila The Philippines’ gaming regulator has reached an agreement with the country’s Entertainment City licensees that effectively slashes the tax on gaming revenue to offset a pending tax on corporate income. The reductions will come in the form of new license fees, which are to be paid in lieu of the tax on GGR, according to prior agreements between the four licensees and PAGCOR, the government-run Philippines Amusement and Gaming Corporation. The new fees will be 15% of mass gaming, down from 25%, and 5% of VIP, down from 15%. The reductions, said PAGCOR, are intended to “make whole” the gaming operators after a Supreme Court order last year removed the regulator/operator’s tax exempt status in conjunction with a ruling from the Bureau of Internal Revenue that PAGCOR is subject to the country’s 30% corporate income tax. By default, the tax also applies to the country’s private operators. The new agreement covers four companies: • Travellers International Hotel Group, a PSX-listed joint venture between the Philippines’ Alliance Global and Genting Hong Kong. Travellers also operates Resorts World Manila, the country’s largest casino; • PSX-listed Bloomberry Resorts, owner of Solaire Resort & Casino, which opened at Entertainment City last March; • PSX-listed Melco Crown Philippines, which is slated to open its City of Dreams Manila at Entertainment City later this year in partnership with Belle Corp., a subsidiary of the Philippines’ SM Group; • Universal Entertainment’s Tiger Resorts Leisure and Entertainment, which plans to open its Manila Bay Resorts at Entertainment City in 2015. The operators all hailed the reductions while noting that they are temporary pending a final disposition of the BIR ruling, which PAGCOR is challenging. “The adjustment ... is not intended to modify, amend or revise the Provisional License/s,” said Melco Crown in a statement. “The parties agreed to revert to the original license fee structure under the Provisional Licenses in the event the BIR action is permanently restrained, corrected or withdrawn.”