Entertainment Gaming Asia sells Cambodia casino after losses

Thursday 26th of June 2014

Entertainment Gaming Asia said it has agreed to sell its Dreamworld Casino in Pailin, Cambodia, to a local buyer after effectively writing off its investment in the property earlier this year.

The company said it sold the casino for $0.5 million, with $100,000 being paid up front and the remainder to be paid in sixteen $25,000 instalments. It has also terminated all of its agreements with its Cambodian partner, who is a relative of the unnamed buyer.

Entertainment Gaming Asia opened the Cambodian property in 2012. It was built on land owned by its partner in the northwest of the country next to the Thai border. The company said the resort has suffered from a low level of natural player traffic, the inability to secure a long-term third-party table game operator and political unrest in Thailand.

However, it did say losses have narrowed in recent months. Casinos in the border areas have been reporting a spike in revenue as Thailand’s new military rulers have cracked down on illegal gambling dens at home.

The Dreamworld sale includes all assets of the casino with the exception of all electronic gaming machines and certain surveillance equipment. It also prohibits any use of the Dreamworld brand name.

In January the company reported an impairment charge of about $2.5 million as of end December 2013 on the casino, which represented the entire capital expenditure incurred as of that date.

For Q1, the company reported a 29 percent drop in profit as both its gaming operations and gaming products division declined. The company reported revenue of $6.9 million. Gaming operations revenue, which comprised slot and casino operations, was $4.1 million for the first quarter of 2014, down 25 percent. Dreamworld Pailin contributed $216,000 to total gaming operations revenue in the first quarter of 2014 compared to $1.1 million in the prior year period.

The company said at the time that it remains committed to seeking new gaming projects in Indochina.

Earlier this week, the Cambodian government indicated that it is planning a major overhaul of the country’s casino market in a bid to attract more investment from major casino operators. The overhaul may include legalizing online betting.