SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Check the appropriate box:

ENTERTAINMENT GAMING ASIA INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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ENTERTAINMENT GAMING ASIA INC.
Unit 3705, 37 ^th Floor, The Centrium,
60 Wyndham Street, Central, Hong Kong

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 13, 2012

To our Stockholders:

The Annual Meeting of Stockholders of Entertainment Gaming Asia Inc., a Nevada corporation, will be held on Friday, July 13, 2012, at 9:00 a.m., local time, at Unit 3705, 37/F, The Centrium, 60 Wyndham Street, Central, Hong Kong to:

Only stockholders of record at the close of business on May 23, 2012 will be entitled to notice of, and to vote at, the meeting and any adjournments of the meeting. It is important that your shares be represented at the meeting. Please mark, sign, date, and mail the enclosed proxy card in the postage-paid envelope provided, regardless of whether you plan to attend in person.

Sincerely,

Clarence Chung,
Chairman of the Board

June 11, 2012
Hong Kong

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		PAGE
QUESTIONS AND ANSWERS ABOUT THE MEETING			1
VOTING OF SHARES			3
PROXY SOLICITATION			5
PROPOSAL ONE — ELECTION OF DIRECTORS			6
PROPOSAL TWO — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			12
PROPOSAL THREE — AMENDMENT TO 2008 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK RESERVED UNDER THE PLAN			13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			14
EXECUTIVE COMPENSATION			16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH THE COMPANY			21
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			23
OTHER BUSINESS			23
HOUSEHOLDING OF ANNUAL MEETING MATERIALS			23
PROPOSALS FOR THE NEXT ANNUAL MEETING			23
INFORMATION INCORPORATED BY REFERENCE			23
ANNUAL REPORT			24

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ENTERTAINMENT GAMING ASIA INC.

 

PROXY STATEMENT FOR
2012 ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 13, 2012

 

The accompanying proxy is solicited on behalf of the board of directors of Entertainment Gaming Asia Inc. (the “Company” or “EGT”) in connection with our Annual Meeting of Stockholders to be held on Friday, July 13, 2012, at 9:00 a.m., local time, at Unit 3705, 37/F, The Centrium, 60 Wyndham Street, Central, Hong Kong for the purposes set forth in the accompanying Notice of Meeting.

Please mark and sign the enclosed proxy card and return it in the accompanying envelope. No postage is required if your returned proxy card is mailed within the United States. We will bear the cost of soliciting proxies, including the preparation, assembly and mailing of the proxies and soliciting material, as well as the cost of forwarding the materials to the beneficial owners of our common stock. Our directors, officers and regular employees may, without compensation other than their regular compensation, solicit proxies by telephone, electronic mail, personal conversation or other means of communication. We may reimburse brokerage firms and others for expenses in forwarding proxy material to the beneficial owners of our common stock.

Any proxy given pursuant to this solicitation and received in time for the Annual Meeting will be voted according to the instructions given in the proxy. Any stockholder giving a proxy may revoke it any time prior to its use at the Annual Meeting by giving a written revocation notice to our secretary, by filing a revoking instrument or a duly executed proxy bearing a later date with our secretary or by attending the Annual Meeting and voting in person.

We expect that this proxy statement, the proxy and notice of meeting will first be mailed to our stockholders on or about June 11, 2012.

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QUESTIONS AND ANSWERS ABOUT THE MEETING

If your shares are held in street name and you have instructed your broker or nominee to vote your shares, you must follow your broker or nominee’s directions in order to change your vote or revoke your proxy.

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Entertainment Gaming Asia Inc.
40 E. Chicago Ave. #186 Chicago, IL 60611-2026
Attn: Traci Mangini
Email address: tracimangini@egt-group.com

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VOTING OF SHARES

Our board of directors has fixed the close of business on May 23, 2012 as the record date for determining the stockholders entitled to notice of, and to vote at, the Annual Meeting. On May 23, 2012, 119,685,280 pre-Reverse Split shares (as set forth below) of our common stock, $0.001 par value, were outstanding and held by approximately 127 record holders. On June 4, 2012, we announced our intention to carry out a reverse split through a combination of the outstanding shares of our common stock on a one for four basis effective on June 12, 2012 (“Reverse Split”). Accordingly, each four pre-Reverse Split shares outstanding on that date entitles its holder to one vote in person or by proxy on each matter to be voted on at the Annual Meeting.

Quorum

The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the outstanding shares of common stock entitled to vote at the meeting is required for a quorum for the transaction of business. In general, shares of common stock represented by a properly signed and returned proxy card will be counted as shares present and entitled to vote at the meeting for purposes of determining a quorum.

Vote Required for Approval

Pursuant to Section 78.330 of the Nevada General Corporation Law, a plurality of the shares voting at the Annual Meeting is required to elect directors. This means that if there are more nominees than the five positions to be filled, the five who receive the most votes will be elected. In counting votes on the election of directors, abstentions, broker non-votes (i.e. shares held of record by a broker which are not voted because the broker has not received voting instructions from the beneficial owner) and other shares not voted will be counted as not voted. These shares will be deducted from the total shares of which a plurality is required.

All other proposals presented in this proxy statement will be approved if a majority of the shares present or represented at the meeting and entitled to vote on the proposal are voted in favor of such matter. In counting votes on each matter other than the election of directors, abstentions and broker non-votes will not be counted as votes cast on the proposal and therefore will not affect the outcome of the proposal, although they will be counted for purposes of determining whether there is a quorum.

Voting of Proxies

Shares of common stock represented by properly executed proxy cards will be voted according to the choices specified. Proxies that are signed by stockholders but that lack any voting instructions will be voted FOR the election of all of the nominees for director listed in this proxy statement, and FOR Proposals Two and Three and in the discretion of the persons voting the respective proxies with respect to any other matter that may properly come before the Annual Meeting

Voting via the Internet, by Telephone or by Mail

As an alternative to voting in person at the Annual Meeting, stockholders whose shares are registered in their own names may vote via the Internet, by telephone or by mailing a completed proxy card. For those stockholders who receive a paper proxy card, instructions for voting via the Internet or by telephone are set forth on the proxy card. Those stockholders who receive a paper proxy card and voting instructions by mail, and who elect to vote by mail, should sign and return the mailed proxy card in the prepaid and addressed envelope that was enclosed with the proxy materials, and your shares will be voted at the Annual Meeting in the manner you direct.

If your shares are registered in the name of a bank or brokerage firm (your record holder), you will receive instructions from your record holder that must be followed in order for your record holder to vote your shares per your instructions. Many banks and brokerage firms have a process for their beneficial holders to provide instructions via the Internet or over the telephone. If you hold shares through a bank or brokerage firm and wish to be able to vote in person at the Annual Meeting, you must obtain a legal proxy from your brokerage firm, bank or other holder of record and present it to the inspector of elections with your ballot.

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting

This proxy statement, our 2011 annual report to stockholders and, if your shares are registered in your name, your proxy card, are available on the Internet. This proxy statement, our annual report to stockholders and, if your shares are registered in your name, your proxy card, are available at: www.cstproxy.com/egt-group/2012.

You may access your proxy materials and, if your shares are registered in your name, vote your shares online by going to www.continentalstock.com and following the prompts. You will need to have your proxy card with you since your card includes your unique identification numbers.

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PROXY SOLICITATION

We are soliciting proxies from our stockholders for our Annual Meeting of Stockholders. We will pay the cost of solicitation of proxies from our stockholders, including preparation, assembly, printing and mailing of this proxy statement and the proxy cards. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our common stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of our common stock for their costs of forwarding solicitation materials to such beneficial owners. In addition to solicitation by use of the mails, proxies may be solicited by our board of directors, officers and employees, in person or by telephone, electronic mail, or other means of communication. No additional compensation for soliciting proxies will be paid to our board of directors, officers or regular employees for such services.

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PROPOSAL ONE — ELECTION OF DIRECTORS

Our bylaws provide that our board will consist of between one and twelve members, with the number of directors determined from time to time by our board. The number of directors is currently set at five. The current term of all of our five directors expires at the Annual Meeting. Accordingly, five directors will be elected at the Annual Meeting to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Each nominee has consented to being nominated and to serve if elected. If any nominee is unable or declines to serve as director at the time of the Annual Meeting, an event not now anticipated, proxies will be voted for any nominee designated by the board of directors to fill the vacancy.

Information About Nominees

Names of the board of directors’ nominees and certain biographical information about the nominees are set forth below.

Clarence (Yuk Man) Chung Age 49 Director since 2007		Mr. Chung joined our board in October 2007 and has served as our chairman of the board since August 2008 and chief executive officer since October 2008. Mr. Chung is also an executive director of Melco International Development Limited, a company listed on the Hong Kong Stock Exchange. He has served on the board of directors of Melco International since May 2006 and is a member of the executive committee, finance committee and corporate social responsibility committee of the company. In addition, Mr. Chung is a non-executive director of Melco Crown Entertainment Limited, a company listed on the Nasdaq Global Market and the Hong Kong Stock Exchange. He has served on the board of directors of Melco Crown since November 2006. Mr. Chung has more than 20 years of experience in the financial industry in various capacities as a chief financial officer, an investment banker and merger and acquisition specialist. Mr. Chung holds a master degree in business administration from the Kellogg School of Management at Northwestern University and the Hong Kong University of Science and Technology, and a bachelor degree in business administration from the Chinese University of Hong Kong. Mr. Chung is also a member of the Hong Kong Institute of Certified Public Accountants and the Institute of Chartered Accountants in England and Wales.
		Mr. Chung has extensive knowledge of the gaming industry in the markets in which the Company operates from his senior management experience with Melco International Development Limited. As a result of these and other professional experiences, the Company has concluded that Mr. Chung is qualified to serve as a director.
Vincent L. DiVito Age 52 Director since 2005		Mr. DiVito joined our board in October 2005 and chairs our audit committee. Since April 2010, Mr. DiVito has served as a financial and management consultant. From January 2008 to April 2010, Mr. DiVito served as president of Lonza America, Inc., a global life sciences chemical business headquartered in Allendale, New Jersey, and also served as chief financial officer and treasurer of Lonza America, Inc. from September 2000 to April 2010. Lonza America, Inc. is part of Lonza Group, whose stock is traded on the Swiss Stock Exchange. From 1990 to September 2000, Mr. DiVito was employed by Algroup Wheaton, a global pharmaceutical and cosmetics packaging company, first as its director of business development and later as its vice president and chief financial officer. Mr. DiVito is a certified public accountant and certified management accountant.

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		Mr. DiVito has served on the board of directors of Riviera Holdings Corporation, a publicly held company, from July 2002 until the consummation of a change in control of the corporation in March 2011.
		Mr. DiVito has extensive knowledge of accounting and corporate governance issues from his experience serving on various corporate board of directors and has extensive operational knowledge as a result of his experience as an operational executive at a major corporation and is invaluable to our board’s discussions of financial and operational issues. As a result of these and other professional experiences, the Company has concluded that Mr. DiVito is qualified to serve as a director.
John W. Crawford, J.P. Age 70 Director since 2007		Mr. Crawford joined our board in November 2007 and chairs our nominating committee and conflicts committee. Mr. Crawford has been the chairman of International Quality Education Limited since February 2002. Prior to that, Mr. Crawford was a founding partner of the Hong Kong office of Ernst & Young where, as chairman of the Audit Division, he acted as engagement or review partner for many public companies and banks before he retired from practice in 1997. Mr. Crawford is a member of the Hong Kong Institute of Certified Public Accountants, a member and honorary president of the Macau Society of Certified Practising Accountants, and a member of the Canadian Institute of Chartered Accountants. Mr. Crawford also serves on the boards of directors and is chairman of the audit committees of e-Kong Group Limited and Titan Petrochemicals Group Limited, both of which are listed on the Hong Kong Stock Exchange. He is also on the board of directors and chairman of the audit committee of Regal Portfolio Management Limited, which manages the Regal Real Estate Investment Trust, the units of which are listed on the Hong Kong Stock Exchange. In February 2012, Mr. Crawford was appointed as a member to the conflicts committee of the Macau Studio City project held by Melco Crown Entertainment Limited although he does not hold any directorships with Melco Crown Entertainment Limited or any of its subsidiaries.
		Mr. Crawford has extensive knowledge of accounting issues from his experience as a managing audit partner at a major international accounting firm and has extensive operational knowledge as a result of his consulting experience, and is invaluable to our board’s discussions of financial and operational issues. As a result of these and other professional experiences, the Company has concluded that Mr. Crawford is qualified to serve as a director.
Samuel (Yuen Wai) Tsang Age 57 Director since 2008		Mr. Tsang joined our board in September 2008. Mr. Tsang is a solicitor admitted in Hong Kong, England and Australia. As group legal counsel and company secretary of Melco since 2001, Mr. Tsang oversees the legal, corporate and compliance matters of Melco, which holds significant interests in a total of four listed companies in Hong Kong, the United States and Canada. Mr. Tsang has worked as a lawyer with major law firms and listed conglomerates in Hong Kong for over 20 years. He holds a master of laws degree from University of Hong Kong and a master of business administration degree from the Australian Graduate School of Management.

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		Mr. Tsang has extensive knowledge of corporate law, corporate governance and the gaming industry, including the regulation of the gaming industry, in the markets in which the Company operates from his senior legal management experience with Melco International Development Limited, and is invaluable to our board’s discussions of legal, governance and regulatory issues. As a result of these and other professional experiences, the Company has concluded that Mr. Tsang is qualified to serve as a director.
Anthony (Kanhee) Tyen, Ph.D. Age 56 Director since 2008		Dr. Tyen joined our board in September 2008 and chairs our compensation committee. Since 1985, Dr. Tyen has been in the proprietorship of his own accountancy and consulting practice, Anthony Tyen & Co. Dr. Tyen is a certified public accountant in Hong Kong and has over 30 years' experience in auditing, accounting, management and company secretarial practice. He holds a doctoral degree in philosophy and a master degree in business administration, both from the Chinese University of Hong Kong. He is an associate member of the Hong Kong Institute of Certified Public Accountants, and a fellow member of both the Association of Chartered Certified Accountants and the Institute of Chartered Secretaries and Administrators. Dr. Tyen has served as an independent non-executive director and a member of audit committee to the board of Melco International Development Limited since June 2010, Summit Ascent Holdings Limited since March 2011 and ASR Holdings Limited since October 2011, all being companies listed on the Hong Kong Stock Exchange. He was previously an independent non-executive director of two Hong Kong listed companies, namely Value Convergence Holdings Limited and Recruit Holdings Limited.
		Dr. Tyen has extensive knowledge of accounting issues and the business operations in the markets in which the Company operates from his experience as an owner of an accounting firm in Hong Kong and is invaluable to our board’s discussions of accounting and operational issues. As a result of these and other professional experiences, the Company has concluded that Dr. Tyen is qualified to serve as a director.

Additional Information about our Board and its Committees

We continue to monitor the rules and regulations of the SEC and the NYSE MKT to ensure that a majority of our board remains composed of “independent” directors. All of our director nominees except Mr. Chung and Mr. Tsang are considered by our board of directors to be “independent” as defined in Section 803A(2) of the NYSE MKT Company Guide.

Our board met five times in 2011. During the year ended December 31, 2011, all of our directors attended at least 75% of all meetings during the periods for which they served on our board, and at least 75% of all of the meetings held by committees of the board on which they serve. The board of directors has formed an audit committee, a nominating committee, a conflicts committee and a compensation committee, all of which operate under written charters. Our board of directors does not have a policy regarding board members’ attendance at meetings of our stockholders.

  Audit Committee

During the year ended December 31, 2011, our audit committee was comprised of Mr. Vincent DiVito, Mr. John Crawford and Dr. Anthony Tyen. Mr. DiVito currently serves as the audit committee chair.

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Our audit committee generally meets at least once a quarter and, in 2011, our audit committee held four meetings. Our audit committee has the responsibility of selecting the firm that will serve as our independent public accountants, approving and reviewing the scope and results of the audit and any non-audit services provided by the independent public accountants and meeting with our financial staff to review internal controls, procedures and policies.

We have identified Mr. DiVito as the audit committee financial expert. Mr. DiVito was previously the president and chief financial officer of Lonza America, Inc., a global life sciences chemical company and he is also a certified public accountant and a certified management accountant. All members of our audit committee are independent, as independence for audit committee members is defined in Section 803A(2) of the NYSE MKT Company Guide. In addition, Mr. Crawford and Dr. Anthony Tyen each meet the definition of “financially sophisticated” as defined in Section 803B(2) of the NYSE MKT Company Guide.

  Nominating Committee

During the year ended December 31, 2011, our nominating committee was comprised of Mr. Vincent DiVito, Mr. John Crawford and Dr. Anthony Tyen. Our nominating committee held one meeting in 2011. Mr. Crawford serves as the nominating committee chair.

The nominating committee is responsible for assisting our board with respect to the appropriate size and composition of our board and monitoring and making recommendations regarding the performance of our board. In this regard, our nominating committee evaluates the qualifications of all proposed candidates for election to our board, including capabilities, availability to serve, conflicts of interest and other relevant factors, and makes recommendations to our board concerning the size and composition of our board of directors.

The members of our nominating committee are considered by our board of directors to be “independent” as defined in Section 803A(2) of the NYSE MKT Company Guide.

The charter of our nominating committee allows the nominating committee to consider for directorship candidates nominated by third parties, including stockholders. For a third party to suggest a candidate, one must provide our legal department with the name of the candidate, together with a brief biographical sketch and a document indicating the candidate’s willingness to serve if elected.

Our nominating committee has recommended Mr. Clarence Chung, Mr. Vincent DiVito, Mr. John Crawford, Mr. Samuel Tsang and Dr. Anthony Tyen as nominees for election to our board of directors at the Annual Meeting.

  Compensation Committee

During the year ended December 31, 2011, our compensation committee was comprised of Mr. Vincent DiVito, Mr. John Crawford and Dr. Anthony Tyen. Dr. Tyen serves as the compensation committee chair.

Our compensation committee held three meetings in 2011. Our compensation committee has the responsibility of setting executive compensation guidelines, administering our stock incentive plans, and approving compensation of our executive officers and members of the board of directors.

The members of our compensation committee are considered by our board of directors to be “independent” as defined in Section 803A(2) of the NYSE MKT Company Guide.

  Conflicts Committee

With regard to transactions between us and our principal stockholder, EGT Entertainment Holding or its affiliates, our board of directors has established a committee of the board, known as the conflicts committee, made up exclusively of members of our board who satisfy the independence requirements of Section 803(A)(2) of the NYSE MKT Company Guide and meet the criteria for independence as set forth in Rule 10A-3(b)(1) under the Exchange Act, and who are not then, and during the two years prior to their appointment or election have not been, an officer, director, employee of or consultant or advisor to EGT Entertainment Holding or any affiliate of EGT Entertainment Holding.

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The conflicts committee operates under a charter that has been approved by our board of directors. While the original conflicts committee charter empowered the conflicts committee to veto any agreement or transaction between us and EGT Entertainment Holding or any of its affiliates involving an aggregate amount in excess of $200,000, in November 2008, following the recommendation by all members of the conflicts committee, the board approved a revision of the charter requiring the conflicts committee to review and approve all material agreements or transactions, if any, between us and EGT Entertainment Holding or its affiliates. The Company filed with the SEC a current report on Form 8-K regarding such revision on April 27, 2009 and the revised charter took effect on May 5, 2009. In August 2010, the board further approved a revision of the charter changing the authorized number of committee members from three to a number no less than two and the Company filed with the SEC a current report on Form 8-K regarding such change on August 4, 2010 and the revised charter took effect on August 11, 2010.

During the year ended December 31, 2011, our conflicts committee has been comprised of Mr. Vincent DiVito and Mr. John Crawford. Mr. Crawford serves as the conflicts committee chair.

Director Compensation

Each member of our board of directors received an initial grant of 100,000 options upon his or her appointment.

From November 2007 to December 2008, members of our board of directors that are not employees received a quarterly fee of $15,000 (which was subsequently reduced to $12,000 with effect from January 1, 2009) and the chairman of our audit committee received an additional $7,500 per quarter (which was subsequently reduced to $6,000 with effect from January 1, 2009).

Since January 2009, our policy had been changed to provide each member of our board of directors with an annual grant of options to purchase 50,000 shares of our common stock and each non-employee board member a quarterly fee of $12,000, provided that the chairman of our audit committee received an additional $6,000 per quarter.

On November 8, 2011, our board of directors, acting upon the recommendation and approval of our compensation committee, approved an amendment to our policy concerning the compensation of our directors. Pursuant to such amendments, effective as of January 1, 2012, each member of our board of directors will receive an annual grant of options to purchase 100,000 shares of our common stock and each non-employee board member will also receive a quarterly fee of $13,500, provided that the chairman of our audit committee will receive an additional $6,500 per quarter. As of the date of this proxy statement, Mr. Samuel Tsang had unconditionally waived all his entitlements to the aforesaid quarterly fees.

All annual grant options will vest in full six months and one day following the date of grant. The exercise price of such options is the market price of our common stock on the date of grant. Our directors are reimbursed for their out-of-pocket expenses related to their services as directors or meeting attendances.

On March 2, 2012, the compensation committee of our board of directors approved the grant of cash bonuses of $25,000 to each non-employee director to catch up for previous reductions in directors’ fees and for their efforts and guidance to management during the year 2011.

Board Leadership Structure and Role in Risk Oversight

Clarence Chung has served as our chairman of the board since August 2008 and chief executive officer since October 2008. We have not adopted a formal policy on whether the chairman and chief executive officer positions should be separate or combined nor do we have lead director. We believe that given the small size of our board of directors and establishment of separate audit, compensation and nominating committees consisting of independent directors that our present board structure is in the best interest of the Company and its stockholders. Our board of directors has an active role in overseeing the Company’s areas of risk. While the full Board has overall responsibility for risk oversight, the board has assigned certain areas of risk primarily to designated committees, which report back to the full board.

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Compensation Committee Interlocks and Insider Participation

No member of our board of directors is employed by us or our subsidiaries except for Mr. Clarence Chung, who is presently employed as our president and chief executive officer. None of our executive officers serve on the board of directors of another entity, whose executive officers serve on the compensation committee of our board of directors. No officer or employee of the Company participated in deliberations of our compensation committee concerning executive officer compensation.

Process for Stockholders to Send Communications to Our Board

Because we have always maintained open channels of communication with our stockholders, we do not have a formal policy that provides a process for stockholders to send communications to our board. However, if a stockholder would like to send a communication to our board, please address the letter to the attention of our legal department and it will be distributed to each director.

Recommendation of the Board of Directors

Our board of directors recommends that you vote FOR the election of all director nominees listed in this proxy statement.

Audit Committee Report

The audit committee reviewed and discussed the Company’s audited financial statements for the year ended December 31, 2011 with our management. The audit committee discussed with Ernst & Young (Hong Kong), the Company’s independent auditors for the fiscal year ended December 31, 2011, the matters required to be discussed by Statement on Auditing Standards No. 114, “The Auditors Communication with Those Charged with Governance”. The audit committee also received the written communication from Ernst & Young (Hong Kong) required by PCAOB Ethics and Independence Rule 3526, “Communication with Audit Committees Concerning Independence”, and the audit committee has discussed the independence of Ernst & Young (Hong Kong) with them.

Based on the audit committee’s review and discussions noted above, the audit committee recommended to our board of directors that the Company’s audited financial statements be included in our annual report on Form 10-K for the year ended December 31, 2011 filed with the SEC on March 30, 2012.

THE AUDIT COMMITTEE

Vincent DiVito, Chairman
John Crawford
Anthony Tyen

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PROPOSAL TWO — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

The audit committee of our board of directors has appointed Ernst & Young (“Ernst & Young (Hong Kong)”), as our independent registered public accounting firm for the fiscal year ending December 31, 2012. It is expected that representatives of Ernst & Young (Hong Kong) will attend the Annual Meeting by way of telephone conferencing, who will have the opportunity to make statements if they desire to do so but they will not be available to respond to questions.

Ernst & Young (Hong Kong) continuously served as our independent registered public accounting firm beginning with the year ended December 31, 2008.

Independent Registered Public Accounting Firm Fees

The following table sets forth the aggregate fees billed to us for services rendered to us for the years ended December 31, 2011 and 2010 by our independent registered public accounting firm, Ernst & Young (Hong Kong), for such years for the audit of our consolidated financial statements for the years ended December 31, 2011 and 2010, and assistance with the reporting requirements thereof, the review of our condensed consolidated financial statements included in our quarterly reports on Form 10-Q and accounting and auditing assistance relative to acquisition accounting and reporting.

		Years Ended December 31,
(Amounts in thousands)		2011		2010 (Note 1)
Audit Fees (Note 1)		$	409			$	451
Tax Fees			53				71
		$	462			$	522

Note (1): 2010 figure included statutory audit fees for one foreign subsidiary and additional fees incurred relating to Quasi-Reorganization.

Audit Committee Pre-Approval Policies

Our audit committee approves all audit fees, audit-related fees, tax fees and special engagement fees. The audit committee approved 100% of such fees for the year ended December 31, 2011.

Recommendation of the Board of Directors

Our board of directors recommends that you vote “ FOR ” the ratification of the selection of Ernst & Young (Hong Kong) as our independent registered public accounting firm for the fiscal year ending December 31, 2012.

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PROPOSAL THREE — AMENDMENT TO THE 2008 STOCK INCENTIVE PLAN TO INCREASE
THE NUMBER OF SHARES OF COMMON STOCK RESERVED UNDER THE PLAN

Section 711 of the NYSE MKT Company Guide requires stockholder approval for the establishment or material amendment to any equity compensation arrangement, with limited exceptions. We are seeking the approval of our stockholders in accordance with Section 711 of the NYSE MKT Company Guide for the amendment of our 2008 Stock Incentive Plan (the “2008 Plan”), to increase the number of common shares authorized for issuance under the plan from 10,000,000 to 15,000,000 pre-Reverse Split shares (which is equivalent to an increase from 2,500,000 to 3,750,000 post-Reverse Split shares). Our board of directors, acting upon the recommendation of the board’s compensation committee, has approved the amendment to the 2008 Plan and recommends the approval of the amendment to increase the authorized shares under the 2008 Plan.

The 2008 Plan was adopted by our stockholders on September 8, 2008. Pursuant to Section 4.1 of the 2008 Plan, the maximum number of shares of common stock of the Company initially available for issuance under the plan was 5,000,000 pre-Reverse Split shares. On July 23, 2010, our stockholders approved an amendment of the 2008 Plan to increase the number of common shares authorized for issuance under the plan to 10,000,000 pre-Reverse Split shares.

As of the date of this proxy statement, we had issued options to purchase 7,500,000 pre-Reverse Split shares (which is equivalent to 1,875,000 post-Reverse Split shares) of common stock and a total of 3,918,613 pre-Reverse Split shares (which is equivalent to 979,654 post-Reverse Split shares) of common stock as restricted and performance stock awards under the 2008 Plan, which in the aggregate exceeds the number of shares currently authorized for issuance under the 2008 Plan by 1,418,613 pre-Reverse Split shares (which is equivalent to 354,654 post Reverse Split shares). We had entered into agreements with certain option holders who hold options granted under the 2008 Plan to purchase in aggregate of these 1,418,613 pre-Reverse Split shares of our common stock and such agreements contain provisions that prohibit their exercise of the said options unless and until the number of shares of common stock that may be issued under the 2008 Plan has been increased in accordance with Section 711 of the NYSE MKT Company Guide by at least 1,418,613 pre-Reverse Split shares (which is equivalent to 354,654 post-Reverse Split shares). Those options are not presently exercisable, but will become exercisable, subject to any other vesting conditions, upon the approval of this Proposal Three.

The compensation committee of our board of directors determined that the 2008 Plan requires additional available shares for issuance to provide flexibility with respect to stock-based compensation that the compensation committee believes is necessary to establish appropriate long-term incentives to achieve our objectives. Our board of directors believes that it is advisable to increase the share limit to 15,000,000 pre-Reverse Split shares (which is equivalent to 3,750,000 post-Reverse Split shares) in order to attract and compensate employees, officers, directors and other eligible participants upon whose judgment, initiative and effort we depend. The issuance of stock options and share grants to these eligible participants is designed to align the interests of such participants with those of our stockholders. It is expected that upon the approval of this Proposal Three, there would be a total of 3,581,387 pre-Reverse Split shares (which is equivalent to 895,346 post-Reverse Split shares) of common stock available for issuance pursuant to the 2008 Plan.

The proposed amendment to the 2008 Plan increases the number of shares of common stock that may be issued upon the exercise of options or issued as restricted stock or performance stock awards by 5,000,000 pre-Reverse Split shares (which is equivalent to 1,250,000 post-Reverse Split shares), or approximately 4.2% of the 119,685,280 pre-Reverse Split shares of common stock outstanding as of May 23, 2012. As amended, the 2008 Plan will continue to provide for appropriate adjustments in the number of shares in the event of a stock dividend, recapitalization, merger or similar transaction.

Recommendation of the Board of Directors

Our board of directors recommends that you vote “ FOR ” the amendment to the 2008 Plan to increase the authorized shares under the 2008 Plan to 15,000,000 pre-Reverse Split shares (which is equivalent to 3,750,000 post-Reverse Split shares).

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

On June 4, 2012, we announced our intention to carry out a reverse split through a combination of the outstanding shares of our common stock on a one for four basis effective on June 12, 2012 (“Reverse Split”). The table below sets forth the beneficial ownership of our common stock, on a pre-Reverse Split basis, as of May 23, 2012, by:

The beneficial ownership of each person was calculated based on 119,685,280 shares of our common stock outstanding as of May 23, 2012, according to the record ownership listings as of that date, the beneficial ownership reports filed by 5% beneficial owners with the SEC and the verifications we solicited and received from each director and executive officer. The SEC has defined “beneficial ownership” to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he owns it in the usual sense, but also if he has the power (solely or shared) to vote, sell or otherwise dispose of the share. Beneficial ownership also includes the number of shares that a person has the right to acquire within 60 days of May 23, 2012, pursuant to the exercise of options or warrants or the conversion of notes, debentures or other indebtedness, but excludes stock appreciation rights. Two or more persons might count as beneficial owners of the same share. Unless otherwise noted, the address of the following persons listed below is c/o Entertainment Gaming Asia Inc., Unit 3705, 37/F., The Centrium, 60 Wyndham Street, Central, Hong Kong.

Name of Director, Executive Officer or Nominee		Shares (1)		Percentage
Clarence (Yuk Man) Chung			5,494,393	(2)			4.6	%
Andy (Kin Ming) Tsui			608,333	(3)			*
Vincent L. DiVito			465,000	(4)			*
John W. Crawford			500,000	(5)			*
Anthony (Kanhee) Tyen			470,000	(6)			*
Samuel (Yuen Wai) Tsang			470,000	(7)			*
All directors and executive officers as a group (6 persons)			8,007,726				6.7	%

Name and Address of 5% Holders
EGT Entertainment Holding Limited 38/F, The Centrium 60 Wyndham Street Central, Hong Kong			45,800,000	(8)			38.3	%
James E. Crabbe Portland, Oregon			8,746,075	(9)			7.3	%

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Equity Compensation Plan Information

At our annual stockholders meeting on September 8, 2008, our stockholders approved our 2008 Stock Incentive Plan (the “2008 Plan”). The 2008 Plan became effective on January 1, 2009, and replaced two previous plans, the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Directors’ Stock Option Plan (the “Previous Stock Option Plans”), both of which expired on December 31, 2008. Although the Previous Stock Option Plans have expired, options granted under those plans and outstanding as of the expiration of the plans remain outstanding and exercisable according to their terms.

The 2008 Plan allows for incentive awards to eligible recipients consisting of:

The original maximum number of shares reserved for issuance under the 2008 Plan was 5,000,000 pre-Reverse Split shares. However, with the approval of the stockholders at our annual meeting held on July 23, 2010, the said maximum number was increased to 10,000,000 pre-Reverse Split shares. We are proposing to further increase the authorized shares to 15,000,000 pre-Reverse Split shares, as more fully described in Proposal Three above. The exercise price of options granted under the 2008 Plan shall not be less than 100% of the fair market value of one share of common stock on the date of grant, unless the participant owns more than 10% of the total combined voting power of all classes of our stock or any parent or subsidiary corporation of ours, in which case the exercise price shall then be 110% of the fair market value.

Pursuant to the aforementioned plans, as of December 31, 2011, there were options outstanding to purchase 12,593,234 pre-Reverse Split shares of our common stock with a weighted average exercise price per share of $0.98 and options available for future issuance to purchase 460,607 pre-Reverse Split shares of our common stock.

The following table sets forth certain information as of December 31, 2011 about our stock option plans and our non-plan options, on a pre-Reverse Split basis, under which our equity securities are authorized for issuance.

Plan Category		(a) Number of Securities to be Issued Upon Exercise of Outstanding Options		(b) Weighted-Average Exercise Price of Outstanding Options		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by security holders			12,593,234			$	0.98				460,607
Equity compensation plans not approved by security holders			—				—				—
Total			12,593,234			$	0.98				460,607

The first column reflects outstanding stock options to purchase: (i) 4,112,834 shares of common stock pursuant to our Amended and Restated 1999 Stock Option Plan with an average exercise price of $1.07; (ii) 90,400 shares of common stock pursuant to our Amended and Restated 1999 Directors’ Stock Option Plan with an average exercise price of $1.71; (iii) 1,990,000 shares of common stock pursuant to certain non-plan options approved by our stockholders in September 2007 with an average exercise price of $2.90; and (iv) 6,400,000 shares of common stock pursuant to our 2008 Plan with an average exercise price of $0.31. The third column reflects 460,607 shares remaining for issuance under our 2008 Plan as of December 31, 2011.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation awarded to, earned by or paid to, our chief executive officer for the years ended December 31, 2011 and 2010 and our only other executive officer earning in excess of $100,000 for services rendered in all capacities for the years ended December 31, 2011 and 2010. Mr. Chung has served as our chief executive officer since October 1, 2008. Mr. Tsui has served as our chief accounting officer since April 2009. Unless otherwise stated, the number of securities stated in this section is on a pre-Reverse Split basis.

(amounts in thousands) Name and Principal Position(a)		Year (b)		Salary (c)		Bonus (d)		Stock Awards (e)		Option Awards (f)		All Other Compensation (g)		Total (h)
Clarence Chung, CEO			2011			$	—	(1)		$	125	(2)		$	324	(3) & (4)		$	193			$	—			$	642
			2010			$	—	(1)		$	100	(4)		$	249	(5) & (6)		$	140			$	—			$	489
Andy Tsui, CAO			2011			$	177			$	37	(2)		$	51	(4)		$	88			$	—			$	353
			2010			$	170			$	30	(4)		$	—			$	35			$	—			$	235

The dollar amounts in columns (e) and (f) reflect the values of shares and/or options as of the grant date for the fiscal years ended December 31, 2011 and 2010, in accordance with ASC 718, Compensation-Stock Compensation and, therefore, do not necessarily reflect actual benefits received by the individuals. Assumptions used in the calculation of these amounts are included in footnote (13) to our audited financial statements for the fiscal year ended December 31, 2011 included in our annual report on Form 10-K for the year ended December 31, 2011 filed with the SEC on March 30, 2012.

Notes:

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Narrative Disclosure to Summary Compensation Table

Unless otherwise stated, the number of securities stated in this section is on a pre-Reverse Split basis.

Mr. Clarence Chung

In November 2009, the compensation committee of our board of directors approved the following compensation for Mr. Chung, the terms of which were included in a written employment agreement dated November 10, 2009 (“November 2009 Agreement”) entered into between us and Mr. Chung for his employment as our Chief Executive Officer (“CEO”) on November 10, 2009:

On December 31, 2011, Elixir Gaming Technologies (Hong Kong) Limited (“EGT-HK”) and Dreamworld Leisure Management Limited (“EGT-BVI”), a newly incorporated company in the British Virgin Islands, both of which are our wholly-owned subsidiaries, each entered into different employment agreements with the CEO. The one entered into by EGT-HK is for the CEO’s services performed within Hong Kong or in relation to the Company’s business, if any, in Hong Kong (the “HK Employment Agreement”) and the other one entered into by EGT-BVI is for the CEO’s services performed outside Hong Kong or in relation to the Company’s business outside Hong Kong (the “Overseas Employment Agreement”).

The service term under both employment agreements is for the remaining term of the November 2009 Agreement, namely, from January 1, 2012 to December 31, 2012. According to the terms of the HK Employment Agreement, the CEO is entitled to an annual base salary of $1.00 and, if applicable, a performance bonus that is discretionary in nature with such amount and form (whether in cash or in kind) to be determined by the Compensation Committee. On the other hand, the CEO is only entitled to discretionary compensation of such amount and form (whether in cash or in kind) to be determined by the Compensation Committee at such time as the Compensation Committee deems appropriate according to the terms of the Overseas Employment Agreement. Save for clearly identifying the jurisdictional differences, the terms of the HK Employment Agreement and the Overseas Employment Agreement are in essence the same as the November 2009 Agreement and upon signing, they have the effect of superseding the November 2009 Agreement.

Pursuant to the resolutions passed by the Compensation Committee on December 31, 2011, the Company granted to Mr. Chung, on that day, as part of his compensation package for 2012: (a) options to purchase 600,000 shares of our common stock at an exercise price of $0.231 per share pursuant to the HK Employment Agreement provided that all these options will be vested and become exercisable on January 1, 2013; and (b) 779,220 shares of restricted common stock, pursuant to our 2008 Stock Incentive Plan and the Overseas Employment Agreement. All 779,220 restricted common shares are subject to vesting and risk of forfeiture based on the ability of the Company to meet certain financial and non-financial performance targets as of and for the fiscal year ending December 31, 2012.

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On March 2, 2012, the Compensation Committee resolved the grant of cash bonus of $125,000 to Mr. Chung pursuant to the Overseas Employment Agreement for his contributions during the year 2011.

During his employment with the Company, Mr. Chung also serves as an executive director of Melco International Development Limited, the parent corporation of our principal stockholder, EGT Entertainment Holding, and receives a salary from Melco for his services rendered to Melco.

Outstanding Equity Awards at Fiscal Year-End 2011

Unless otherwise stated, the number of securities stated in this section is on a pre-Reverse Split basis.

Option Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price		Option Expiration Date (mm/dd/yy)
Clarence Chung			200,000	(1)			—				—			$	2.90				05/17/2012
			30,000	(2)			—				—			$	3.62				01/22/2018
			100,000	(3)			—				—			$	4.59				11/14/2017
			2,000,000	(4)			—				—			$	0.17				12/29/2013
			50,000	(5)			—				—			$	0.13				02/12/2019
			50,000	(6)			—				—			$	0.29				01/07/2020
			500,000	(7)			—				—			$	0.28				01/22/2020
			50,000	(8)			—				—			$	0.36				02/03/2021
			500,000	(9)			—				—			$	0.36				02/03/2021
Andy Tsui			200,000	(10)			—				—			$	0.08				12/11/2018
			150,000	(11)			—				—			$	0.26				03/12/2020
			—				250,000	(12)			—			$	0.36				02/03/2021

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2011 Director Compensation Table
(All amounts in this table are in thousands)

Unless otherwise stated, the number of securities stated in this section is on a pre-Reverse Split basis.

Name		Fees Earned (b)		Stock Awards (c)		Option Awards (d)		Non-Equity Incentive Plan Compensation (e)		Change in Pension Value and Nonqualified Deferred Compensation Earnings (f)		All Other Compensation (g)		Total (h)
Vincent DiVito		$	72			$	35			$	17			$	—			$	—			$	25			$	149
John Crawford		$	48			$	35			$	17			$	—			$	—			$	25			$	125
Anthony Tyen		$	48			$	35			$	17			$	—			$	—			$	25			$	125
Samuel Tsang		$	—			$	35			$	17			$	—			$	—			$	25			$	77

The dollar amounts in columns (c) and (d) reflect the values of equity awards as of the grant date, in accordance with ASC 718, Compensation-Stock Compensation , and, therefore, do not necessarily reflect actual benefits received by the individuals. Assumptions used in the calculation of these amounts are included in footnote (13) to our audited financial statements for the fiscal year ended December 31, 2011 included in our annual report on Form 10-K for the year ended December 31, 2011 filed with the SEC on March 30, 2012.

Each member of our board of directors received an initial grant of 100,000 options upon his or her appointment.

On November 8, 2011, our board of directors, acting upon the recommendation and approval of our compensation committee, approved that effective as of January 1, 2012, each member of our board of directors will receive an annual grant of options to purchase 100,000 shares of our common stock and each non-employee board member will receive a quarterly fee of $13,500, provided that the chairman of our audit committee will receive an additional $6,500 per quarter. As of the date of this proxy statement, Mr. Samuel Tsang had unconditionally waived all his entitlements to the aforesaid quarterly fees.

All annual grant options will vest in full six months and one day following the date of grant. The exercise price of such options is the market price of our common stock on the date of grant. Our directors are reimbursed for their out-of-pocket expenses related to their services as directors or meeting attendances.

SEC Position on Certain Indemnification Arrangements

Our articles of incorporation obligate us to indemnify our directors and officers to the fullest extent permitted under Nevada law. Chapter 78 of the Nevada Revised Statutes provides for indemnification by a corporation of costs incurred by directors, employees, and agents in connection with an action, suit, or proceeding brought by reason of their position as a director, employee, or agent. The person being indemnified must have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us pursuant to the provisions contained in our articles of incorporation, our bylaws, Nevada law or otherwise, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers or controlling persons in the successful defense of any action, suit, or proceeding, is asserted by such director, officer or controlling person, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the

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question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of this issue.

Indemnification Agreements

We have entered into indemnification agreements with members of our board of directors and certain other employees in which we agreed to hold harmless and indemnify such directors, officers and employees to the fullest extent authorized under Nevada law, and to pay any and all related expenses reasonably incurred by the indemnitee. The relevant members of our board of directors are Mr. Clarence Chung, Mr. Vincent L. DiVito, Mr. John Crawford, Mr. Samuel Tsang and Dr. Anthony Tyen.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH THE COMPANY

Transaction Review

We have adopted a policy that any transactions with directors, officers or entities of which they are also officers or directors or in which they have a financial interest, will only be on terms consistent with industry standards and approved by a majority of the disinterested directors of our board. Our bylaws provide that no such transactions by us shall be either void or voidable solely because of such relationship or interest of directors or officers or solely because such directors are present at the meeting of our board or a committee thereof which approves such transactions, or solely because their votes are counted for such purpose if:

In addition, interested directors may be counted in determining the presence of a quorum at a meeting of our board or a committee thereof that approves such transactions. If there are no disinterested directors, we shall obtain a majority vote of the stockholders approving the transaction.

With regard to transactions between us and our principal stockholder, EGT Entertainment Holding or its affiliates, our board of directors has established a committee of the board, known as the conflicts committee. For details of the scope of authority and composition of our conflicts committee, please refer to the section “Conflicts Committee” in Proposal One — Election of Directors set forth above.

The conflicts committee charter shall not be amended or modified unless (i) such amendment or modification has been approved and recommended by a majority of the members of the conflicts committee and (ii) at least five business days preceding the effective date of such amendment or modification we have filed with the SEC a current report on Form 8-K that accurately and fully discloses the proposed amendment or modification and the basis for the conflicts committee’s recommendations.

EGT Entertainment Holding Limited (“EGT Entertainment Holding”) Transactions

Trade Credit Facility and Subsequent Amendments

On April 21, 2008, we entered into a Trade Credit Facility Agreement (the “Facility Agreement”) with Elixir International Limited (“Elixir International”), a company which used to be a wholly-owned subsidiary of EGT Entertainment Holding, our principal stockholder. Pursuant to the Facility Agreement, Elixir International provided trade credits to us for our purchase of electronic gaming machines (“EGMs”) from Elixir International in exchange for our issuance of unsecured notes to Elixir International bearing interest at a fixed rate of eight percent (8.0%) per annum. Title of any EGMs offered in exchange for the notes passed to us upon issuance of the notes.

Upon entering into the Facility Agreement, we immediately issued the first note pursuant to the terms of the Facility Agreement in the principal amount of $15 million (the “Initial Advance”), thereby extinguishing the payable of an equivalent amount to Elixir International in respect to EGMs previously acquired. We were obligated to repay the principal, plus any accrued interest thereon, of the Initial Advance in 24 equal monthly installments. The Initial Advance was subject to demand by Elixir International for immediate payment only if there was either an event of default or a change of control as defined in the Facility Agreement.

An “event of default” occurs pursuant to the Facility Agreement if, among other things, we default in the payment when due of any principal or interest on any note issued pursuant to the Facility Agreement; or we become insolvent or generally fail to pay or admit in writing our inability to pay our debts as they become

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due; or we apply for, consent to, or acquiesce in the appointment of a trustee, receiver or other custodian for ourselves or any of our property, or make a general assignment for the benefit of our creditors; or a trustee, receiver or other custodian will otherwise be appointed for us or any of our assets and not be discharged within 30 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is commenced by or against us and be consented to or acquiesced in by us or remains undismissed for 30 days; or we take any corporate action to authorize, or in furtherance of, any of the foregoing; or any judgments, writs, warrants of attachment, executions or similar processes (not undisputedly covered by insurance) in an aggregate amount in excess of $100,000 is issued or levied against us or any of our assets and will not be released, vacated or fully bonded prior to any sale and in any event within 30 days after its issue or levy; or we become subject to pending or threatened litigation, arbitration or a governmental litigation or proceeding, not previously disclosed to Elixir International, and such action could have a material adverse affect on our operations or financial condition.

A “change of control” occurs pursuant to the Facility Agreement if, among other things, after April 21, 2008: (i) any person or two or more persons acting in concert (other than Elixir International or its affiliates) acquire beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of our company representing 50% or more (on a fully-diluted basis) of the combined voting power of all our securities (other than securities owned by EGT Entertainment Holding or its affiliates) entitled to vote in the election of directors; or (ii) our sale of substantially all of our assets; or (iii) any sale of our securities by EGT Entertainment Holding or its affiliates or any issuance of new securities by us resulting in the combined voting power of all our securities (on a fully-diluted basis) owned by EGT Entertainment Holding or its affiliates falls below 30%.

As a result of the disposal of Elixir International by EGT Entertainment Holding, Elixir International assigned and novated all its rights and obligations under the Facility Agreement and the related promissory note (as amended) to EGT Entertainment Holding in April 2010.

Subsequent to its origination, the Facility Agreement has been amended three times, most recently on May 25, 2010 on which date we entered into Amendment No. 3 to the Facility Agreement with EGT Entertainment Holding (the “Third Amendment”), pursuant to which we issued another new note (the “Third Amended Note) to replace previous terms. Under the payment schedule of the Third Amended Note, the outstanding principal balance of $9.2 million and the interest accrued thereon were restructured in the following manner: (a) the total interest accrued on the Outstanding Principal Balance during the period from July 1, 2009 to June 30, 2010 in the amount of $458,000 to be paid by us in a lump sum payment on July 1, 2010; (b) on the first day of each calendar month during the period from August 1, 2010 to June 1, 2011, we will pay interest in arrears on the Outstanding Principal Balance at the same rate of 5% per annum for the preceding month; and (c) we will repay the Outstanding Principal Balance and interest accrued thereon at the rate mentioned above in 18 equal monthly installments commencing on July 1, 2011. Pursuant to the terms of the Third Amendment, we paid total principal and interest of approximately $3.0 million and $417,000 respectively to EGT Entertainment Holding during the year ended December 31, 2011.

Melco Transactions

Hong Kong Office Premises

On March 16, 2011, we entered into a license agreement with Melco Services Limited (“Melco Services”), which is the principal tenant of a larger office area, for occupying our existing Hong Kong office premises with an area of approximately 1,920 square feet (the “License Agreement”). Pursuant to the License Agreement, we are required to pay a monthly fee of HK$94,000 (equivalent to approximately $8,700) to Melco Services and such monthly fee covers the relevant rental, the relevant management fees, air-conditioning and other utilities and services charges. Melco Services confirmed that all these fees are charged at cost without any markup. The License Agreement is for a term commencing from March 17, 2011 until March 16, 2013, which is the expiration date of the head lease between Melco Services and the landlord of the relevant building.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Rules adopted by the SEC under Section 16(a) of the Securities Exchange Act of 1934, or the Exchange Act, require our officers and directors, and persons who own more than 10% of the issued and outstanding shares of our equity securities, to file reports of their ownership, and changes in ownership, of such securities with the SEC on Forms 3, 4 or 5, as appropriate. Such persons are required by the regulations of the SEC to furnish us with copies of all forms they file pursuant to Section 16(a).

Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us during our most recent fiscal year, and any written representations provided to us, we believe that all of the officers, directors, and owners of more than ten percent of the outstanding shares of our common stock complied with Section 16(a) of the Exchange Act for the year ended December 31, 2011.

OTHER BUSINESS

We know of no business that will be presented for consideration at the Annual Meeting other than that described in this proxy statement. As to other business, if any, that may properly come before the Annual Meeting, it is intended that proxies solicited by our board will be voted according to the judgment of the person or persons voting the proxies.

HOUSEHOLDING OF ANNUAL MEETING MATERIALS

Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement or annual report to stockholders may have been sent to multiple stockholders in each household. We will promptly deliver a separate copy of either document to any stockholder upon written request to Investor Relations, Elixir Gaming Technologies, Inc., 40 E. Chicago Ave. #186 Chicago, IL 60611-2026 or tracimangini@elixirgaming.com .

Any stockholder who wants to receive separate copies of our proxy statement or annual report in the future, or any stockholder who is receiving multiple copies and would like to receive only one copy per household, should contact the stockholder’s bank, broker, or other nominee record holder, or the stockholder may contact the Company at the above correspondence address and email address.

PROPOSALS FOR THE NEXT ANNUAL MEETING

For any proposal to be considered for inclusion in our proxy statement and form of proxy for submission to the stockholders at our 2013 Annual Meeting, it must be submitted in writing and comply with the requirements of Rule 14a-8 of the Securities Exchange Act of 1934. Such proposals must be received by the Company at its offices at Unit 3705, 37/F, The Centrium, 60 Wyndham Street, Central, Hong Kong no later than February 10, 2013. Our board of directors will review any proposals from eligible stockholders that it receives by that date and will make a determination whether any such proposals will be included in our proxy materials. Any proposal received after February 10, 2013 shall be considered untimely and shall not be made a part of our proxy materials.

A stockholder who wishes to make a proposal at the next Annual Meeting without including the proposal in our proxy statement must also notify us within a reasonable time before we print and mail the proxy materials. If a stockholder fails to give reasonable advance notice, then the persons named as proxies in the proxies solicited by us for the next Annual Meeting will have discretionary authority to vote on the proposal.

INFORMATION INCORPORATED BY REFERENCE

We are permitted to incorporate by reference information that we file with the Securities and Exchange Commission. Accordingly, we incorporate by reference our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the SEC on March 30, 2012, except to the extent information in that report is different from the information contained in this proxy statement. The information incorporated by reference includes the description of our executive officers set forth in Part III, Item 10 “Directors, Executive Officers and Corporate Governance” in our 2011 Annual Report on Form 10-K.

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ANNUAL REPORT

COPIES OF OUR ANNUAL REPORT ON FORM 10-K, INCLUDING ALL EXHIBITS, CAN BE OBTAINED WITHOUT CHARGE BY CONTACTING BY WRITTEN REQUEST TO INVESTOR RELATIONS OF ENTERTAINMENT GAMING ASIA INC. AT 40 E. CHICAGO AVE. #186 CHICAGO, IL 60611-2026 OR TO THE EMAIL ADDRESS AT tracimangini@egt-group.com.

		BY ORDER OF THE BOARD OF DIRECTORS
		Clarence Chung Chairman of the Board
June 11, 2012 Hong Kong

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