RICHMOND, BC, March 30, 2012 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("the Company") announced that it has received notice from the Ontario Lottery and Gaming Corporation ("OLG") that the OLG will terminate the site holder agreements with the Company's Georgian Downs Ltd. ("Georgian Downs") and Flamboro Downs Ltd. ("Flamboro Downs") subsidiaries effective March 31, 2013. All of the terms and conditions of the site holder agreements will continue in full force and effect until March 31, 2013, including the obligation to continue live horse racing events at the racetracks.
The Company is currently studying the implications of this notice. OLG previously announced that they will engage in negotiations on new arrangements for OLG and/or private sector vendors to occupy space at racetrack locations where there is customer interest. As such, there may be an opportunity for the Company to enter into future negotiations with the OLG regarding the operation of slot machines at the Georgian Downs and Flamboro Downs racetrack locations. If the OLG does not enter into new agreements with the Company, then the future profitability of Georgian Downs and Flamboro Downs will be negatively affected and goodwill and long-lived asset impairments will be necessary.
During the year ended December 31, 2011, Georgian Downs and Flamboro Downs generated a combined $34.4 million in Revenues and $17.4 million in EBITDA.
The Company's executives are planning to meet with the OLG to discuss both the risks to the Company's existing operations and the potential future opportunities that may arise from the Province's continued modernization of gaming in Ontario.
ABOUT GREAT CANADIAN GAMING CORPORATION
Great Canadian Gaming Corporation is a multi-jurisdictional gaming and entertainment operator with operations in British Columbia, Ontario and Nova Scotia, and Washington State. The Company operates ten casinos, a thoroughbred racetrack that offers slot machines, three standardbred racetracks (two offer slot machines and one offers both slot machines and table games), two community gaming centres, a bingo hall, a resort with two hotels, a conference centre and a marina, two show theatres and various associated food and beverage and entertainment facilities. As of December 31, 2011, the Company had approximately 4,000 employees in Canada and 600 in Washington State. Further information is available on the Company's website, www.gcgaming.com.
ON BEHALF OF
GREAT CANADIAN GAMING CORPORATION
"Original signed by Rod N. Baker"
Rod N. Baker
President and Chief Executive Officer
This news release contains certain "forward-looking information" or statements within the meaning of applicable securities legislation. Forward-looking information is based on the Company's current expectations, estimates, projections and assumptions that were made by the Company in light of its historical trends and other factors. All information or statements, other than statements of historical fact, are forward-looking information including statements that address expectations, estimates or projections about the future, the Company's strategy for growth, expected future expenditures, costs, operating and financial results, expected impact of future commitments, the future ability of the Company to operate the Georgian Downs and Flamboro Downs facilities and their profitability, and the ability of the Company to enter into new agreements for the operation of gaming facilities at Georgian Downs and Flamboro Downs. Such forward-looking information is not a guarantee of future performance and may involve a number of risks and uncertainties. Although forward-looking information is based on information and assumptions that the Company believes are current, reasonable and complete, they are subject to a number of factors that could cause actual results to vary materially from those expressed or implied by such forward-looking information. Such factors may include, but are not limited to: terms of operational service agreements with lottery corporations; changes to gaming laws and policies that may impact our operational service agreements; the willingness of regulatory authorities to enter into new operating agreements with the Company; pending, proposed or unanticipated regulatory or policy changes; unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; adverse tourism trends and further decreases in levels of travel, leisure and consumer spending; competition from established competitors and new entrants in the gaming business; dependence on key personnel; the risk that systems, procedures and controls may not be adequate to meet regulatory requirements or to support current and expanding operations; potential undisclosed liabilities and capital expenditures associated with acquisitions; negative connotations linked to the gaming industry; First Nations claims with respect to
some Crown land on which we conduct our operations; future or current legal proceedings; construction disruptions; financial covenants associated with credit facilities and long-term debt; credit, liquidity and market risks associated with our financial instruments; interest and exchange rate fluctuations; non-realization of cost reductions and synergies; demand for new products and services; fluctuations in operating results; and economic uncertainty and financial market volatility. These factors and other risks and uncertainties are discussed in the Company's continuous
disclosure documents filed with the Canadian securities regulatory authorities from time to time, including in the "Risk
Factors" section of the Company's Annual Information Form for fiscal 2011, and as identified in the Company's disclosure record on SEDAR at www.sedar.com. The forward-looking information in documents incorporated by reference speak only as of the date of those documents. Readers are cautioned not to place undue reliance on the forward-looking information, as there can be no assurance that the plans, intentions, or expectations upon which they are based will occur. The Company undertakes no obligation to publicly revise forward-looking information to reflect subsequent events or circumstances except as required by law. The forward-looking information contained herein is made as of the date hereof and is expressly qualified in its entirety by cautionary statements in this news release.
The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this news release. EBITDA as defined by the Company means Earnings Before Interest and financing costs (net of interest income), Income Taxes, Depreciation and Amortization, stock-based compensation, restructuring and other costs, impairment of long-lived assets, impairment of goodwill, foreign exchange loss and other, and non-controlling interests. EBITDA is derived from the consolidated statements of earnings (loss), and can be computed as revenues less human resources expenses and property, marketing and administration expenses.
Readers are cautioned that these non-IFRS definitions are not recognized measures under International Financial Reporting Standards ("IFRS"), do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to net earnings determined in accordance with IFRS or as indicators of performance or liquidity or cash flows. The Company's method of calculating these measures may differ from methods used by other entities and accordingly our measures may not be comparable to similarly titled measures used by other entities in other jurisdictions. The Company uses these measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.
For further information:
For investor enquiries:
Ms. Tanya Ruskowski
Executive Assistant to the President and Chief Executive Officer and the Interim Chief Financial
For media enquiries:
Mr. Howard Blank
Vice-President, Communications, Entertainment & Responsible Gaming