Asia Entertainment & Resources Ltd. Announces Non-Binding Memorandum of Understanding to Acquire King’s Gaming Promotion Li...

Asia Entertainment & Resources Ltd. (“AERL”) (NASDAQ: AERL, AERLW), which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, today announced that it has entered into a non-binding memorandum of understanding, whereby, through AERL's fully owned subsidiary, it will acquire a 100% profit interest in the operations of King’s Gaming Promotion Limited (KGP), a Macau-based VIP room gaming promoter that currently operates one room with five tables at the Venetian Macao-Resort-Hotel on the Cotai Strip. Subject to due diligence and customary closing conditions, Asia Entertainment expects to close the transaction by November 30, 2010.

“We are pleased to have the opportunity to add King’s Gaming Promotion to the Asia Entertainment family,” said AERL Chairman Lam. “KGP has been successful in maintaining an average Rolling Chip Turnover of approximately HK$1 billion (approximately US$129 million) per month over the past six months under a fixed 1.25% commission on Rolling Chip Turnover. We believe by combining our operations and network of agents with that of King’s Gaming, we can expand our presence in the Macau VIP gaming market into the Cotai Strip, while ultimately providing our shareholders with long-term value.”

AERL's existing VIP gaming rooms are all located in Downtown Macau and KGP's VIP gaming room is in the Venetian Resort on the Cotai Strip, which will offer an alternative for AERL's existing agents and patrons and should result in an increase in revenue in addition to KGP's historical monthly Rolling Chip Turnover of US$129 million. This acquisition will also offer an alternative for KGP’s existing agents and patrons, which should result in an increase in the Rolling Chips Turnover in the two existing VIP gaming rooms in Downtown Macau. AERL believes that this acquisition will increase both gross revenues and net earnings, as well as broaden AERL’s agent network. As a result of this acquisition, AERL believes that revenues generated under the 1.25% fixed commission scheme will increase from the current 80% level and would further reduce monthly earnings volatility.

KGP's Chairman Mok Chi Hung said, "We are excited to join AERL because of its strong reputation and presence in the VIP gaming space, which aligns well with our core customer base. We believe that this will provide an increased opportunity to expand our current business."

Given AERL's average monthly chips turnover of US$748 million during the past nine months and KGP's average monthly chips turnover of over US$129 million during the same period, we expect average monthly chips turnover of greater than US$877 million because of an expected increase in volume at KGP's VIP gaming room due to the alternative provided for AERL's existing agents and patrons. Based upon AERL's historical growth, and assuming completion of the acquisition, we expect the monthly rolling chips turnover to exceed US$1 billion during 2011 and thus should result in an increase in earnings.

The total upfront consideration for KGP is expected to be approximately US$9 million and 1.5 million shares for 100% of KGP’s operations. Additionally, if KGP annual net profit attains a minimum of US$6.15 million in each of the three years post-closing, its shareholders would receive three additional purchase consideration installments of up to US$9 million and performance-based contingent share issuances of 500,000 shares. KGP can receive additional incentives for exceeding these targets. KGP will have an option at the end of each year to convert the cash portion of the payment into AERL shares at US$7.50 per share for the first year, US$9.50 per share for the second year and US$12.00 per share for the final year, and will have the opportunity to earn further incentive shares for years four through ten upon meeting certain minimum growth objectives. KGP’s promoter, Mok Chi Hung, would provide a personal guarantee for any bad loans associated with operations of KGP.

Definition of Rolling Chip Turnover

Rolling Chip Turnover is used by casinos to measure the volume of VIP business transacted and represents the aggregate amount of bets players make. Bets are wagered with "non-negotiable chips” and winning bets are paid out by casinos in so-called "cash” chips. "Non-negotiable chips” are specifically designed for VIP players to allow casinos to calculate the commission payable to VIP room gaming promoters. Commissions are paid based on the total amount of "non-negotiable chips” purchased by each player. VIP room gaming promoters therefore require the players to "roll,” from time to time, their "cash chips” into "non-negotiable” chips for further betting so that they may receive their commissions (hence the term "Rolling Chip Turnover”). Through the promoters, "non-negotiable chips” can be converted back into cash at any time. Betting using rolling chips, as opposed to using cash chips, is also used by the Macau Gaming Inspection and Coordination Bureau (DICJ) to distinguish between VIP table revenue and mass market table revenue.

About Asia Entertainment & Resources Ltd.

AERL, formerly known as CS China Acquisition Corp., acquired AGRL on February 2, 2010. AGRL is an investment holding company of subsidiaries that, through profit interest agreements with affiliated companies known as VIP gaming promoters, are entitled to receive all of the profits of the VIP gaming promoters from VIP gaming rooms. AGRL’s VIP room gaming promoters currently participate in the promotion of two major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world. One of the VIP gaming rooms is located at the top-tier MGM Grand Macau Casino in downtown Macau that is operated by the MGM Grand Paradise S.A. The other Macau VIP gaming facility is located in the luxury 5-star hotel, the Star World Hotel & Casino in downtown Macau, which is operated by Galaxy Casino, S.A.

Forward-Looking Statements

This press release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of AERL's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements.