Dreamworld Operator Sees Revenue Drop

Entertainment Gaming Asia (EGA), which operates casinos and slot machines in Cambodia and the Philippines, recorded a 9 percent drop in revenue last year compared to 2012, from $26.8 million to $24.3 million, according to the company’s annual report.

EGA operates casinos in Pailin and Poipet provinces and also runs slot machines in Phnom Penh’s NagaWorld and Thansur Bokor in Kampot province, but the recent figures reflect a patchy year for its operations in Cambodia.

Total revenue for the three months ending 2013 was $6.1 million, down 32 percent compared to $9 million in the fourth quarter of 2012, while year on year revenue from 1,756 gaming seats in Cambodia alone saw a 5 percent drop, from $14.7 million in 2012 to $13.9 million.

The results follow the announcement in January that EGA, a subsidiary of the Macau-based Melco Group, had written off its $2.6-million investment in Dreamworld Casino in Pailin province, citing lower-than-expected gambler numbers crossing the Thai border.

The company is looking at various options for Dreamworld Casino, including subletting its gaming tablets, and considering pulling out of Pailin altogether. However, falling revenue at EGA’s NagaWorld slot machines contributed to the downturn.

“[S]lot operations revenue for the 2013 fiscal year decreased 8 percent compared to the prior year primarily as a result of lower average net wins from NagaWorld…and the week-long official mourning period for Cambodia’s former king and [a] strike by NagaWorld workers, both of which occurred in February 2013,” the report says.

The political and labor protests in Phnom Penh during the fourth quarter of 2013 also negatively impacted player traffic at NagaWorld, the report says, contributing to a 7 percent decrease in slot operations revenue compared to the same period last year.

Losses were partially offset by incremental revenue from Dreamworld Poipet, which officially opened in May 2013, and an improvement in average net wins from its machines in Thansur Bokor.

“Dreamworld Poipet officially opened in May and made meaningful contributions to revenue for the year; however, performance was negatively impacted in the fourth quarter due to political unrest in Thailand and adverse weather earlier in the quarter,” EGA chairman Clarence Chung said during the fourth quarter conference call last week.

EGA could not be contacted Monday regarding the future of Dreamworld Pailin, and Chrun Theravuth, chief of the casino management office at the Ministry of Finance’s industry department said he was too busy to discuss the matter.

Mr. Chung said during the conference call that EGA would continue to monitor the situation.

“[W]e continue to be proactive in our management and marketing efforts to minimize the volatility resulting from the political situations and protests in Cambodia and Thailand, which impacted certain of our slot properties,” he said, adding that though Cambodia remains an attractive market with long-term potential, no assurances could be given on whether any new projects will be realized.

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