Decline in Philippine slots and chip sales hits EGA

Entertainment Gaming Asia Inc.’s second quarter consolidated revenue dropped 5 percent to $5.8 million from a year earlier, with drops in both its chip making and Philippine slot business contributing to the decline. The chip and plaque business generated $162,000 in revenue, down 83.4 percent as the company shifted production to Hong Kong from Australia between March and May. EGA, controlled by Melco International Development Ltd., said the new factory is fully operational, with 24-hour production underway on $2 million in orders though it incurred $166,000 in start up costs. Clarence Chung, chairman and chief executive, told analysts he expects to secure another order “of a couple million dollars” from a new casino “probably this year”.

Slot revenue in the Philippines slipped 20 percent to $800,000 in the quarter, with the company citing competition from new Manila casinos and higher jackpot payouts. Nasdaq-listed EGA reduced the number of gambling machine seats in operation in the country by 9 percent to 570 to focus on higher performing machines and said it is focusing on “improving customer loyalty” and looking for opportunities in the expectation there will be a consolidation among slot clubs.