Canada
Great Canadian Gaming Announces Second Quarter 2020 Results
Great Canadian Gaming Corporation announced its financial results for the three month period ended June 30, 2020 (the “second quarter”).
SECOND QUARTER 2020 UPDATES
The Company’s gaming facilities and ancillary amenities across the country have been temporarily closed since March 16, 2020 in an effort to contribute to the containment of the COVID-19 coronavirus pandemic (“the pandemic”).
Shareholders’ net loss from continuing operations of $31.4 million or $0.57 per common share in the second quarter, compared to shareholders’ net earnings from continuing operations of $48.0 million or $0.81 per common share in the same period in the prior year.
The Company has resumed certain Ontario capital projects after government mandated closures on non-critical construction projects were lifted by the Government of Ontario on May 19, 2020.
“We had a full quarter of business closure as a result of the temporary suspensions since March 16, 2020 in response to the pandemic. While we have taken actions to significantly reduce our operating expenses during the closure period, our second quarter results were negatively impacted materially by the closures. Since the closure of our 25 operations across the country almost five months ago, we worked closely with key stakeholders such as our Provincial Crown corporations and regulators to ensure our plans properly address provincial health authorities’ guidance and recommendations as provincial economies reopen,” stated Rod Baker, the Company’s Chief Executive Officer. “Certain provinces have now approved casinos to reopen as part of their phased reopening plans, and we are working diligently on determining the reopening timelines and dates as we complete the necessary health and safety enhancements outlined in our plans.”
FINANCIAL REVIEW
The temporary closures of the Company’s operations resulted in a decrease in revenues, expenses, Adjusted EBITDA1, Free Cash Flow1, and cash flows when compared to the same period in the prior year.
During the second quarter, the Company took measures to significantly reduce its operating expenses to mitigate the decline in revenues from the gaming facility closures. Human resource expenses in the second quarter primarily consisted of costs related to remaining personnel required to support the business during the closure period. For the three months ended June 30, 2020, approximately half of the property, marketing and administration expenses were related to direct property operating costs, including property taxes, insurance, utilities and maintenance, with the remaining half related to administration costs, including licenses, subscriptions and professional fees.
Revenues and Adjusted EBITDA for the second quarter were $62.8 million and $31.8 million, respectively. Revenues for the second quarter primarily consisted of the Ontario bundles’ annual entitlement of service provider fees for permitted capital expenditures recognized in full in the second quarter and continued service provider base fixed fees under the respective casino operating agreements, which resulted in a positive Adjusted EBITDA. Adjusted EBITDA was also positively impacted by $20.9 million in lease payments which are no longer recognized as operating expenses in Adjusted EBITDA due to the implementation of IFRS 16, the new lease accounting standard adopted in the prior year.
The Company recognized negative cash flows in the second quarter due to the temporary suspension of operations. In the second quarter, the Company had negative of $123.4 million, which was consisted of Adjusted EBITDA of $31.8 million, as previously discussed, less changes in non-cash working capital of $22.2 million, capital expenditures of $98.6 million, substantially all of which was in Ontario, payment of lease liabilities of $20.9 million, and interest paid of $13.5 million. The Company funded the negative Free Cash Flow of $123.4 million by borrowing an additional $60.7 million on its credit facilities for capital expenditures in Ontario and the remainder from available cash balances.
The Company had cash outflow of $383.7 million for the second quarter. Prior to the end of the first quarter of 2020, the Company drew $325.0 million on the revolving portion of the Senior Secured Credit Facilities to ensure it had sufficient liquidity available, which was repaid in full during the second quarter of 2020. Other cash outflows for the second quarter included payments to satisfy working capital obligations, payment of lease liabilities and capital expenditures, as discussed above.
Shareholders’ net loss from continuing operations was $31.4 million in the second quarter due to the above mentioned facility closures, which had a negative impact on revenues.
SOURCE Great Canadian Gaming Corporation
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Hot on the heels of its most attended conference in history, the International Association of Gaming Regulators (IAGR) is excited to announce that its 2025 conference will take place in Toronto, Canada, from October 20 to 23, 2025.
The event will be held in partnership with the Alcohol and Gaming Commission of Ontario (AGCO) at the Westin Harbour Castle, offering stunning waterfront views and a premier, downtown Toronto location.
‘Fresh off the success of our Rome conference, we’re thrilled to continue the momentum with next year’s event in Toronto,’ said Ben Haden, IAGR President.
‘The IAGR 2025 conference promises to be another unparalleled opportunity for our global community to come together, collaborate and shape the future of gaming regulation. We’re looking forward to working with AGCO to bring it all together.’
AGCO CEO and Registrar Dr. Karin Schnarr, added, ‘We’re excited to welcome IAGR and its members to Toronto. This partnership provides a great opportunity to share Ontario’s innovative regulatory practices and foster meaningful discussions that drive positive change in the industry.’
Stay tuned for registration details early next year.
Bombee Global Entertainment Ltd
ESE Entertainment Completes Acquisition of Gaming Production Company, Bombee Americas
ESE Entertainment Inc., a gaming company that provides a range of services to leading video game developers and publishers, has announced that it has acquired Bombee Global Entertainment Ltd. (Bombee Americas), the North American arm of Bombee Event Production AB, (Bombee), a global production company specialized in live production, special effects, broadcast, and event management for the gaming sector.
Bombee has successfully collaborated with ESE to bring its premier event production services and world class customer service to North America and beyond. The North American arm of Bombee, Bombee Americas, will continue to grow and scale in this new organizational structure under ESE, while maintaining its entire team and global support.
Konrad Wasiela, CEO of ESE, said: “Today marks the next stage of ESE—a 2.0 version of our company. With the acquisition of Bombee Americas, we are not only solidifying our presence in North America but also paving the way for growth and innovation in the gaming industry. This is a major step, positioning us to deliver even greater value to our partners and elevate the gaming experience for our clients globally. We’re thrilled about the opportunities ahead and the exceptional talent joining our team.”
Transaction Terms
The Acquisition was completed by way of a share purchase agreement (the SPA) among the Company, Bombee Americas, and the shareholders of Bombee Americas (the Vendors). Pursuant to the SPA, ESE acquired all of the outstanding shares of Bombee Americas in exchange for: (i) $750,000 in cash paid on closing, (ii) $375,000 in cash to be paid six (6) months following closing, subject to customary adjustments based on the working capital of Bombee Americas on closing, (iii) $375,000 in cash to be paid twelve (12) months following closing, and (iv) 30,000,000 common shares of ESE (the Consideration Shares), issued at a deemed issue price of $0.10 per share.
In connection with the Acquisition, the founders of Bombee Americas have signed three-year service agreements and will continue to run the business following the closing, along with the rest of the personnel of Bombee Americas who will remain in place, ensuring a smooth transition of operations. As part of the Acquisition, the Company has acquired the liabilities of Bombee Americas, mainly consisting of customary current obligations incurred in the ordinary course of business for Bombee Americas, which are not expected to have a material impact on the Company’s operations or financial position.
No finder’s fees were paid or payable in conjunction with the Acquisition.
The Acquisition was an arm’s length transaction within the meaning of the policies of the TSX Venture Exchange (the Exchange) and constituted an “Expedited Acquisition” in accordance with Exchange Policy 5.3 – Acquisitions and Dispositions of Non-Cash Assets. The Acquisition remains subject to the final approval of the Exchange.
Canada
Suspected Digital Fraud Coming from Canada Up Nearly 11% Since H1 2023, Reveals New TransUnion Analysis
In the first half (H1) of 2024, Canada saw a significant increase in suspected Digital Fraud attempts, with nearly 5.74% of all attempted digital transactions where the consumer was located in Canada involving suspected Digital Fraud, revealed a new TransUnion® (NYSE: TRU) analysis. This is nearly an 11% year-over-year (YoY) rate increase from H1 2023, and TransUnion also documented an 11% increase in the volume of suspected Digital Fraud from Canada during this period, despite a less than a one percent (0.7%) YoY increase in the volume of transactions.
According to a recent TransUnion survey,1 more than half (54%) of Canadians said they were recently targeted by email, phone call or text message fraud attempts. Phishing was the most common scheme type (45%), followed by smishing (42%) and vishing (39%).
The increasing use of digital transactions, combined with rising suspected Digital Fraud attempts are also impacting businesses as they potentially face revenue losses and increased operational costs due to fraud. According to a TransUnion business survey for the H2 2024 Update to the State of Omnichannel Fraud report, 200 Canadian business leaders said their companies lost approximately 6% of equivalent revenue – representing $78 billion – over the past year due to fraud. The most prominent causes of fraud loss cited by them were:
- Scam/Authorized fraud (31%): Dishonest scheme intended to trick a person into giving up something of value (e.g., account access, money, information)
- Account takeover (19%): Unauthorized individuals taking over someone’s online account (e.g., bank, social media, email) without their permission
- Synthetic identity fraud (18%): Use of a combination of personal information to fabricate a person or entity to commit a dishonest act for financial or personal gain
TransUnion also found that suspected Digital Fraud attempts – where the consumer was transacting in Canada and targeted businesses globally – increased on average by 10.5% YoY in H1 2024 compared to H1 2023 and impacted all industries.
Top Three Industries Globally with Highest Rate of Suspected Digital Fraud Attempts Coming from Canada in H1 2024
- Gambling (online sports betting, poker, etc.) – 9.6%
- Retail – 9.2%
- Government – 7.7%
Top Three Industries Globally with Highest YoY Increase (H1 2024 vs H1 2023) in the Rate of Suspected Digital Fraud Attempts Coming from Canada
- Logistics – 172.9%
- Gambling – 79.3%
- Video gaming – 67.8%
“Protecting customers and their businesses from fraud is essential to enabling safe and tailored consumer experiences. These findings reveal that despite the good-faith efforts that are being undertaken by companies to identify and prevent fraud to date, fraudsters continue to evolve and it’s vital that fraud prevention methods keep up with the changing times,” said Patrick Boudreau, head of identity management and fraud solutions at TransUnion Canada.
“Businesses that aren’t already doing so should ensure that they are taking advantage of fraud prevention technologies such as identity verification, IP intelligence, device reputation and synthetic identity detection as critical components of their fraud prevention programs,” he added.
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