Nasdaq-listed gaming supplier Entertainment Gaming Asia Inc., which is controlled by Lawrence Ho’s Melco International Development Ltd., has renewed its agreement under which EGA leases slot machines and related equipment to Cambodian casino NagaWorld.
The new agreement includes the lease of 670 gaming machines, measured on a per-seat basis. It replaces a 2010 deal that expired on February 29 which also involved the lease of 670 slots, Entertainment Gaming Asia said in a Friday filing.
Melco International Development Ltd., a company controlled by Ho, holds approximately 64.84 percent of Entertainment Gaming Asia. Melco International is one of the two controlling shareholders of Asian casino developer Melco Crown Entertainment Ltd.
NagaWorld is owned and managed by Hong Kong-listed NagaCorp Ltd.
Under the new agreement, NagaWorld will pay Entertainment Gaming Asia a fixed fee per machine seat per day.
“The lease payments will be graduated for the first six months of the agreement,” Entertainment Gaming Asia said in its filing.
“From March 1 through May 31, 2016, the lease payments per machine seat per day will be US$22. From June 1 through August 31, 2016, the lease payments will be US$20 per machine seat per day. Beginning September 1, 2016, the lease payments will be US$18 per machine seat per day.”
In the previous contract, Entertainment Gaming Asia was entitled to 25 percent of the leased slot machines’ net win, and NagaCorp the remaining 75 percent.
Under the new deal, Entertainment Gaming Asia “will be responsible to pay the withholding tax and provide on-site machine and system maintenance but will not provide any other operational support staff,” the firm stated in its filing.
There is no expiration date specified in the contract. NagaWorld can terminate the deal at any time, but must give Entertainment Gaming Asia one month’s notice of termination. The latter can also terminate the contract if NagaWorld fails to fulfill its contractual obligations.
