Falling income from Great Canadian Gaming’s (TSX:GC) three racetrack casinos and Coquitlam’s Boulevard Casino, combined with flat revenue at the group’s flagship River Rock Casino Resort in Richmond, forced GCG’s revenue down by 4% in 2011’s fourth quarter.
On Thursday, the company reported a $1.5 million year-over-year drop. However, the company’s overall revenue increased from $383.5 million in 2010 to $388.2 million in 2011 with net earnings of $26.2 million. GCG lost $8.1 million in 2010.
CEO Rod Baker said River Rock averages 70,000 guests a week, but its table drop (the amount bet) fell 4% in the fourth quarter, mainly attributed to lower revenue at high-end tables. The property’s $24 million Hotel at River Rock, which opened in October, helped offset the decrease by bumping the complex’s revenue up by 2%.
Boulevard’s decrease was blamed on Port Mann Bridge construction, competition and the “uncertain local economy.” A $60 million hotel and conference facility is under development.
GCG wrote off $4.4 million of property, plant and equipment at Hastings Racecourse.
Baker called horse-racing a “sunsetting” industry, with revenue falling 10% to 15% a year across the continent. The Hastings Racecourse lease with City of Vancouver expires in November. GCG has rejected renewing on existing terms, but continues to negotiate. The live racing season runs April 14 to October 14.
Racetrack revenue was down 16% for the whole of 2011 to $19.5 million.
GCG also operates the Flamboro Downs in Hamilton, Ontario, and Georgian Downs in Barrie, Ontario. In a February report, the Ontario government was warned that its deficit would reach $30 billion by 2017-18 without major cutbacks. The government is considering ending the $345 million subsidy to racetracks.
“It's a serious and potentially challenging situation for us,” Baker said.
