On Wednesday, September 9, the Great Canadian Gaming Corp. announced that its ‘Ontario Gaming East Limited Partnership,’ an entity in which it owns a 50.1 per cent share, has been chosen to operate gaming facilities in the Ontario Lottery and Gaming Corp.’s ‘Gaming Bundle 2,’ which is also referred to as the ‘East Gaming Bundle.’

Great Canadian operates entertainment hospitality facilities in British Columbia, Ontario, Nova Scotia, and Washington State, and is most well known in the Canadian Standardbred racing industry for operating live harness racing at its Flamboro Downs and Georgian Downs in Ontario and Fraser Downs in British Columbia.

A Great Canadian release on the deal explains that on Tuesday, September 8, 2015, Ontario Gaming East LP signed a business transition and asset purchase agreement with OLG. The agreement, which is subject to customary closing conditions, calls for Ontario Gaming East LP to sign a 20-year casino operating and services agreement when the acquisition closes early next year (the deal is expected to close in the first quarter of 2016).

When the agreement closes, Ontario Gaming East LP will acquire all of OLG's gaming assets in the East Gaming Bundle, which includes OLG Casino Thousand Islands and the slot operations that are within leased space at Kawartha Downs. Great Canadian has divulged in its release that the purchase price in the agreement is $37.4 million, plus cash of approximately $13 million to cover working capital.

The agreement will also allow give Ontario Gaming East LP the opportunity to erect a ‘new build’ gaming establishment which would service the City of Belleville and the municipality of Quinte West.

Part of Great Canadian’s release on the deal states that under the planned casino operating and services agreement, Ontario Gaming East LP will operate the gaming facilities in the East Gaming Bundle and will provide OLG a pre-established, guaranteed annual payment. In return, Ontario Gaming East LP will receive an annual fee comprised of, among other components, an annual base fee as well as 70% of gross gaming revenue above the applicable pre-established amount for each year. The GCG release also states that additional, specific details about the casino operating and services agreement and the planned financial arrangement are not permitted to be disclosed at this time under the terms of OLG's procurement process.

"We thank OLG for the opportunity to participate in the modernization of gaming in Ontario and are both honoured and excited to have been awarded this first gaming bundle," Great Canadian’s president and CEO Rod Baker was quoted as saying in the company’s release.

The OLG has also issued a release on the agreement in which OLG President and CEO Stephen Rigby was quoted as saying that “Today’s announcement marks an important milestone in OLG’s modernization and the future of our organization. As the service provider for the East Gaming Bundle, the investments Ontario Gaming East LP will make will help move modernization forward while ensuring we continue to deliver an exceptional experience for our customers.”

Great Canadian Vice President Chuck Keeling has been quoted as saying that it is currently premature to discuss where the new build could be located. He also declined to get into any of the specific details that as associated with such an endeavour. “There isn’t a vision we can disclose just yet,” he has said. “We want to start working on all the details in terms of where would this go.”

Although he declined to get into specifics, Keeling did state that Great Canadian is hoping to get the new build up and running in 2017. “We would envision being up and operational sometime in 2017,” he said, adding, “that’s a very aggressive timeline and is entirely contingent on our development proposal advancing accordingly at the municipal and OLG level.”

(With files from the OLG, GCG and The Belleville Intelligencer)