Reports broke earlier this week that one of Canada’s premier operators of brick-and-mortar casinos, Gateway Casinos & Entertainment, is up for sale. Two months after the passing of its Chief Executive Officer Tony Santo, unnamed sources from the industry claimed that the company had hired Macquarie Group and Morgan Stanley to find potential buyers.
As one of the top operators of land-based gaming establishments in Canada, Gateway operates the day-to-day work at 31 casinos across British Columbia, Ontario and Alberta. Currently, its business facilitates work for around 7,200 individuals, while its gaming floors tout 391 table games, 14,288 slot machines, 81 food and beverage sites, and 564 hotel rooms.
Seeking around CA$2 Billion
The operator is reportedly looking to receive offers in the region of CA$2 billion, including debt, and has hired Macquarie Group and Morgan Stanley to find suitors. The company is majority-owned by the Catalyst Capital Group, which is a private equity firm with more than CA$6 billion in assets under management. The latter took control of the gaming company back in 2010.
It should be mentioned that the gaming conglomerate was built on acquisitions, assuming that Catalyst Capital Group is looking for the cited CA$2 billion figure, there could be plenty of candidates to purchase it. Caesars Entertainment and Century Casinos are most likely not on the list of potential suitors, as several U.S. companies limit their exposure in Canada.
The corporation could be an appealing asset for a buyer that will see the value of its real estate, and potentially extract value out of by trimming its portfolio of casino properties. The buyer would also have to see potential in the Canadian gambling sector, as the country has a population of around 38.25 million people which is not that much compared to the U.S.
Despite being a privately owned company, this was not always the plan. In December 2019, hedge fund HG Vora tried to team up with Catalyst Capital and Leisure Acquisition Corp. to bring the gambling company public at a CA$1.15B valuation. But due to delays, the agreement fell through in June 2020, however, no exact reason was provided for the collapse of the deal.
Latest on the Gaming Leader
In the meantime, the sale has not stopped Gateway Casinos from expanding its existing properties across Canada. Most recently, the company launched a brand-new poker room at Starlight Casino New Westminster in B.C. The room features four tables with ‘no limit and ‘limit’ stakes at different levels, seven flat-screen TVs and an exclusive menu with a daily breakfast special.
Before that, the company also announced that it had started its expansion plan for Gateway Casinos London in the Western Fair District in Ontario. Via the renovations, the London gaming amenity will boost its gaming floor from 70,000 to 84,000 square feet. The plan will take twenty-seven months to finish, but it is divided into five phases not to affect customers’ experience.
Source: Shriber, Todd “Gateway Casinos Mulling Sale, Seeking $2B” Casino.org, October 17, 2023