Casino owner’s woes persist
Casino owner’s woes persist
The share price of Cambodian casino owner Entertainment Gaming Asia has fallen below the minimum requirement of the Nasdaq Stock Market, threatening the gaming company’s US listing, according to a statement posted on EGA’s website last week.
EGA has been given 180 days – until October 14 – to lift its share price from $0.87 to the Nasdaq’s minimum of $1 and must hold that price for at least 10 consecutive days, according to the April 23 announcement. If, however, the company fails to reach the target within this period, a second 180-day grace period may be granted before EGA’s stock could be delisted from the exchange.
“The company will work to regain listing compliance and believes that it has options available to ensure continued listing on Nasdaq,” reads the announcement from the casino developer owned by Melco Group, a Macau gaming giant.
“Management and the board of directors are evaluating these options to determine the optimal course of action.”
At market close on Friday in US the firm’s price sat at $0.82.
EGA operates two Dreamworld-branded casinos on Cambodia’s border with Thailand. The company’s Pailin province operation – valued at $2.5 million – houses some 26 gaming tables and 52 electronic gambling machines (EGMs).
In Poipet, EGA operates a gaming floor with 300 EGMs.
The firm also supplies 670 EGMs to NagaWorld, the country’s largest gaming operator.
The Nasdaq noncompliance notice is the latest in a string of bad results for the gaming company after recording a 9 per cent revenue slump from $26.8 million in 2012 to $24.3 million in 2013, according to the firm’s 2013 annual report, which notes that further losses are expected.
“For the year ended December 31, 2013, we incurred a net loss from continuing operations of approximately $5.2 million and may continue to incur losses for the foreseeable future,” EGA’s annual report says.
To add to the company’s woes, the annual report states that EGA’s NagaWorld contract expires in 2016 and “there can be no assurances that we will be able to renew the contract under similar conditions, if at all”.
In January, EGA announced it was walking away from its Pailin casino operation, which opened in May 2012. The firm wrote off its initial $2.5 million investment in the venture, citing a failure to lure gamers from across the Thai border.
Staff at EGA yesterday confirmed the company was still overseeing operations in Pailin. However, they declined to provide any further details on the struggling casino.
Michael Ting, gaming analyst with Hong Kong-based CIMB, said NagaWorld’s monopoly on the Phnom Penh gaming sector makes it difficult for smaller-scale operations to compete, especially in luring high-roller clientele.
“Going forward, Cambodia’s border casinos’ piece of the pie might begin to decrease unless they start to attract higher-spending clients. So far the attraction hasn’t shown,” he said, adding that a lack of information from casinos in Cambodia’s border towns makes it difficult to asses the situation.
“In regards to the border casinos, if Vietnam or Thailand do establish a gaming market, that will certainly affect their gamer numbers and profits.”
NagaWorld holds a monopoly agreement as the only gaming operator allowed within 322 kilometres (200 miles) of Phnom Penh until 2035.
EGA and Melco Group did not respond to requests for comment.
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