Great Canadian Gaming Corp.’s (GCG) revenue from horse racing facilities could take another hit given the Ontario Lottery and Gaming Corp.’s (OLGC) March 12 announcement that it would take several steps to “modernize” gambling in the province.
One of the new measures the OLGC proposes is to stop basing OLGC-owned slot machines at horse racing facilities.
GCG (TSX:GC) owns two horse racing facilities in Ontario: Georgian Downs and Flamboro Downs. Most of the revenue at those facilities comes from OLGC slot machine rent, based on a percentage of total amount bet.
During the 2011 calendar year, Georgian Downs generated $16.1 million in revenue, 79% of which related to gaming revenue earned on the OLGC slot machines operated on the property and 11% related to racetrack revenue.
During the year, Flamboro Downs generated $18.3 million in revenues, of which 68% related to the OLGC slot machines and 17% related to racetrack revenue generated by from hospitality offerings and other sources.
Business in Vancouver recently reported that GCG’s horse racing revenue has been falling in recent years.
But GCG spokesman Howard Blank said the OLGC’s new rules do not necessarily impair the business case for GCG to operate Ontario horse racing tracks because a private partner could come in to own and operate those machines.
“That someone else could be us,” Blank told BIV March 14. “We don’t know if there will be an RFP process or if there will be purpose-built facilities in different markets.”
Blank praised the British Columbia Lottery Corp.’s (BCLC) model that has long enabled GCG to operate its own slot machines at its B.C. racetracks: Hastings Racecourse and Fraser Downs Racetrack and Casino.
