C ROW N L I M I T E D A N N UA L R E P O RT 2 0 0 8 P.19
Crown holds a 50 percent equity interest in Gateway Casinos following its acquisition in November 2007 by New World Gaming, a 50:50 joint venture between Crown and Macquarie Bank.
Gateway Casinos operates seven casinos in British Columbia and two casinos in Alberta. These are operated under a unique business partnership model required under Canadian law whereby the Provincial Government owns the slot machines and tables, while Gateway collects an agreed share of gross gaming revenue. Additional compensation is received by Gateway in British Columbia to reimburse capital expenditure until the original amount is recovered. This usually takes five to eight years. Gateway retains ownership of the asset.
Operating performance
Trading at Gateway over the seven months since acquisition was negatively impacted by the introduction of full smoking bans in April 2008, the new Starlight property (which opened in December 2007) trading below expectations and delays in implementing previously identified operational improvements.
New developments
There are a number of projects in the development pipeline: the new Burnaby Grand Villa Casino, scheduled to open in late 2008; the expanded Cascades Casino, to be completed in late 2008;the new Vernon Casino, opening mid-2009; and expanded Kelowna Casino and new Kamloops Casino, both scheduled for completion in 2010. On completion of these new developments, Gateway will operate more than 5,400 slot machines and over 200 tables,together with 277 hotel rooms.
Outlook
Crown expects to see improved performance as additional capacity comes on line from new properties and expansions. Crown expects that the Gateway business will be a profitable long-term investment.
No comments:
Post a Comment