Gateway’s financial problems due to Covid-19 have been answered, with the casino operator being the first to receive a loan from the Canadian federal government. The CA$200 million loan, which will be repaid, will go towards rehiring all employees and reopening its 26 properties.
Gateway Casinos and Entertainment, which operates over 26 casinos and gambling halls across Canada, are set to receive CA$200 million as a federal loan to help the private operator get back on its feet after losing substantial revenue due to the coronavirus pandemic. The Vancouver-based company has been in operation since 1992, and employs thousands of people in British Columbia, Alberta and Ontario. However, due to the lockdown which was enforced back in mid-March, more than 8,000 employees have been furloughed.
The employees and their families depend on Gateway for their survival. For this reason, the government has decided to loan Gateway a whopping CA$200 million, part of which has to go to rehiring all the workers. The loan is happening through the Canada Enterprise Emergency Funding Corporation (CEEFC) and is the first loan to be granted by its subset, the Large Employer Emergency Financing Facility (LEEFF). According to Gateway, the money left over will all be used to help the company recover from the substantial financial losses it has incurred after more than six months of lockdown, with a few of its venues still closed.
Apart from the rehiring of employees, some of the money has gone towards the application of health and safety measures, as without these, reopening would not be possible. Rehiring and reopening is estimated to have cost Gateway about CA$60 million from the government loan. Gateway CEO Anthony Santo has expressed his gratitude towards receiving the loan and has said that “the LEEFF financing will support restarting our operations and returning people to work when it is safe and viable to do so”, and that “through a successful and sustainable restart of operations, we will bring jobs back and begin the work of repaying the LEEFF facility.”
The injection of cash has come as welcome news for both employees and the operator, as it can now set in motion its reopening plans for its 26 venues, twelve of which are in Ontario. What is more, Gateway had another venue which was being renovated before the pandemic struck, and another venue estimated to cost around CA$45 million under construction in Greater Sudbury. There is still no timeline when these last two casinos will open their doors. However, one of the casinos which is currently closed and which is set to benefit from the federal loan is Casino Rama in Ontario.
According to Corey Dalton, president of Unifor Local 1090, Casino Rama’s employees are struggling financially after being out of work for six months. At the moment, these workers are being supported by the Canada Emergency Wage Subsidy, through the paid inactive leave program. Although this was meant to stop last week, it has now been extended till 2021. The union has also managed to negotiate an extension of health benefits for the workers until the end of September, but thanks to the LEEFF funding, this will now be extended until the end of October. Nevertheless, more than 70% of the employees are eager to return to their jobs.
Gateway has reiterated its concerns over the sustainability of reopening in Ontario more than once, stating that a 50-person cap at all times inside each venue is not financially feasible. However, the LEEFF funding has eased those concerns. Gateway is now set to start reopening its venues. Robert Mitchell, spokesperson for Gateway, has said that “all of our plans have been independently reviewed by a health and safety subject matter expert and have been submitted to the regulator, the Alcohol and Gaming Commission of Ontario.” It is now up to the Ontario government to greenlight the reopening of Gateway’s casinos and gaming venues.