NEW YORK, May 5, 2014 (GLOBE NEWSWIRE) -- Elray Resources Inc. (OTCBB:ELRA) announced today that it has entered into a Letter of Intent to form a Joint Venture with one of Asia's most experienced Junket Operators, Mr. Qi Xiaolong and Associates.
The JV will result in Elray holding a profit share agreement with VIP Rooms in Macau, under which Elray will receive an up to 48% share of profits generated by the Licensed Casino Operations. Mr. Qi and his team currently participates in the revenue streams of many major luxury VIP gaming facilities in Macau, China the largest and most lucrative gaming market in the world.
VIP gaming operations in Macau consist of VIP rooms that cater exclusively to high-limit Baccarat table games. Gaming Promoters in Macau have historically maintained the majority of VIP customer relationships. The Promoters secure VIP rooms through agreements in which they receive either a commission on turnover or a percentage of the casino net gaming win or loss on a pre-gaming tax basis.
Mr. Qi will appoint an executive director to the board of Elray with Brian Goodman remaining as Chief Executive.
Upon signing the agreement, Mr. Qi commented, "I am excited to be part of this new venture which will enable us to capitalize on the largest gaming market in the world and the benefits provided by Elray and its experienced management team will enable me to exponentially grow my existing gaming business and raise the additional capital to make acquisitions and open multiple licensed VIP rooms in Macau."
Brian Goodman, CEO stated that, "Elray has been working hard to participate in this lucrative and rapidly growing market and whilst it has had some interim setbacks it will now be free to enter this lucrative arena. It has been a steep learning curve but Elray is well positioned to add value to Mr. Qi's existing gaming business. The Macau opportunity together with the US listing will enable the company to raise growth capital, acquire other gaming promoters in Macau as well as in other jurisdictions and create a profitable company, creating enormous institutional worth, whilst aggressively increasing the brand value on a global scale returning excellent returns for shareholders, overall an excellent result for Elray shareholders." "This partnership will result in immediate revenues for Elray."
Mr. Qi Xiaolong and Associates
Mr. Qi's and his team have over 20 years of gaming experience and have a large network of successful agents throughout China. Mr. Qi has a valuable Network of High Wealth Players that will continue to support this business and the new VIP Gaming Rooms that will be opened. Mr. Qi is an educated Chinese Citizen and his team of professional gaming operators will be leading the future development and growth of Elray within Asia.
About Macau
Macau is part of the territory of the People's Republic of China.
Macau is one of the most rapidly growing economies in Asia and is the only territory within China where casino operations has been legalized.
Macau's gaming industry is already 7 times that of Las Vegas.
Analysts at Nomura, forecasted in a recent report that gambling revenue could nearly double to $80 billion by 2018. This helps explain why operators like Wynn, Sands and SJM are prepared to plow billions of dollars into more expansion despite the fact that taxes on gambling revenue in Macau are far above those in Nevada.
Gaming revenue from the six operators of China's only legal casinos rose 18.6 percent to $45.2 billion USD last year that compares with the average estimate of a 18 percent growth from five analysts compiled by Bloomberg News. The Macau gaming industry has grown at an average of 37.5% per annum over the last 5 years. (2007 to 2011, source: Macau Statistics and Census Bureau)
Casino Hotels in Macau, have occupancy rates of more than 90 percent. And statistics released on March 3 showed that gambling revenues to operators in February had jumped 40 percent from a year earlier, to a record $4.8 billion.
The forest of cranes on the Cotai Strip is also testimony to the casino operators' faith that Beijing, is content to let gambling thrive in Macau, which is a special administrative region of China with its own regulations and where casino like gambling is allowed, unlike on the mainland.
In an anchor report, Nomura Securities cited two main reasons why they are bullish on Macau. First, the market is still very under-penetrated. Many Chinese from mainland China have not paid their visit to Macau yet. Second, in an under-penetrated market, supply drives growth. As more casinos become available in Macau, the pie will expand with a multiple effect.
About Elray
Elray is an established Gaming entity which owns and licenses Gaming Intellectual Property, Gaming Domains, Trademarks and Player Databases. Whilst Elray is a US company, we have a global presence with offices in London, South Africa, Sydney and Curacao, homes of the largest gaming operators, which helps us actively manage and serve our clients. Our sophisticated patented software automatically declines any gaming requests from within the United States, in strict compliance with current US law. Our Sydney office allows us to tap into skilled resources and some of the world's largest client base, for regular, personal interaction. As our active operations are in a jurisdiction that is friendly to online gaming, our clients can rest assured that we are here to stay. www.elraygaming.com
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future development activities, and are thus prospective. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with the Company's business and finances in general, including the ability to continue and manage its growth, competition, global economic conditions and other factors discussed in detail in the Company's periodic filings with the Security and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements.