A New York–based alternative-management fund is betting big on the Canadian casino industry.
Apollo Global Management Inc. is buying all the shares of Toronto-based Great Canadian Gaming Corporation in a $3.3-billion deal. That's based on Apollo valuing GCC shares at $39.
Great Canadian operates Hard Rock Casino Vancouver, Hastings Racecourse & Casino, and River Rock Casino Resort in Metro Vancouver, as well as seven other casinos in B.C.
The company's business has been walloped by COVID-19. On March 16, the B.C. Lottery Corporation "temporarily closed" casinos, community gaming centres, and bingo halls to prevent the spread of the disease.
“Great Canadian is a leader in the gaming and entertainment industry and, based on our experience and knowledge of the space, we see opportunities to work with their talented team to drive additional growth and value," Apollo partner Alex van Hoek said in a GCC news release. "With an industry-leading portfolio of assets and established presence in the best geographic markets across Canada, we are excited to help bring an enhanced experience to more guests across Canada.”
Late last month, Apollo announced that its total assets under management grew to US$433 billion in the most recent quarter. That was up US$102 billion from the end of 2019.
Great Canadian, formerly known as Great Canadian Casino, was founded in 1982 to operate charity casinos in B.C., including at the Pacific National Exhibition in Vancouver. Its first permanent casino opened in 1986 at the Holiday Inn on West Broadway in Vancouver.
A list of Great Canadian gambling locations is available here.
Former mayor made good money on the board
In 2004, it bought the Hastings Racecourse—the same year up to 600 slot machines were allowed there following a rezoning application to Vancouver city council.
Then mayor Larry Campbell cast the deciding vote in favour.
Three years after his mayoral term expired, Campbell was appointed to the Great Canadian board of directors while he was serving in the Canadian Senate.
In 2019, Sen. Campbell collected $187,500 as a Great Canadian director, according to the company's securities filings.
That was on top of his $150,600 salary as a senator.
According to the company's last management information circular, the former Mountie held more than $2.1 million in deferred share units in 2019.
Horgan promoted slot machines
Many British Columbians are not aware that Premier John Horgan played a critical role in a sophisticated lobbying effort back in 2004 to bring slot machines to the Hastings Racecourse.
He and his business partners' campaign enlisted a retired police sergeant, SFU criminologist Neil Boyd, and a former NDP cabinet minister, Ian Waddell, along with various community organizations.
"Our objective here was to bring those diverse groups together to see the benefit of allowing slot machines in Vancouver...city projects through increased revenue, a future for charitable organizations through a new facility, and jobs for trade unionists," Horgan told the Straight at the time. "Once the fabric all came together, the cloth looked pretty impressive for a majority of council, and that's why we were successful."
Horgan's chief of staff, Geoff Meggs, was a senior staffer in Larry Campbell's office when the then mayor gave the green light to slot machines.