RICHMOND, BC, March 13, 2012 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("the Company") announced today that on March 12, 2012, the Government of Ontario issued a news release indicating that they have directed the Ontario Lottery and Gaming Corporation ("OLG") to implement a number of proposals to modernize gaming in the Province. The proposals announced included, amongst others:
- Stopping the annual payments to the horse racing industry by ending the "Slots at Racetracks" program on March 31, 2013, and allowing slot facilities to be located more strategically;
- Reconfiguring the number of gaming sites and tailoring the types of gaming activities made available at each site;
- Increasing operational efficiencies by expanding the role of the private sector;
- Implementing a new fee model for municipalities hosting gaming sites; and
- Allowing one new casino in the Greater Toronto Area ("GTA"), subject to an OLG business case and municipal approval.
The OLG's plans for the future of their existing owned and operated slot machines at Georgian Downs and Flamboro Downs is not certain at this time. OLG has indicated 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.
During the year ended December 31, 2011, Georgian Downs generated $16.1 million in revenues, 79% of which related to gaming revenues earned on the OLG's slot machines operated on the property and 11% related to racetrack revenues. During the year ended December 31, 2011, Flamboro Downs generated $18.3 million in revenues, of which 68% related to the OLG's slot machines and 17% related to racetrack revenues. The remainder of each property's revenues arose from hospitality offerings and other sources.
If the OLG stops the "Slots at Racetracks" program, as directed by the Province, and the Company no longer receives revenues from the OLG's slot machines at its two standardbred racetracks in Ontario, then the future profitability of Georgian Downs and Flamboro Downs will be negatively affected and goodwill and long-lived asset impairments will be necessary.
The Company is currently studying the implications of these proposals and will meet with the OLG to discuss both the risks to our existing operations and the potential future opportunities that may arise from the 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 and expected impact of future commitments. 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 that may impact our operational service agreements; 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.
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