Last week, Loto-Québec sold off shares of its investment in the French casino developer JOA Group. While the shares were snapped up by British and American Alchemy, Davidson Kempner, the move still signals a major defeat for Quebec’s gaming industry.
As recently as September 2014, Loto-Québec affirmed its commitment to the French casino investment, despite losses of more than $120 million and widespread criticism from Québec residents. Locals felt that Loto-Québec should be investing in Canadian gaming, not casinos overseas.
By March 2014, Loto-Québec’s shares of the JOA Group were essentially worthless. Meanwhile, the JOA Group realized losses of over $631 million in U.S. dollars, and had lost 10 percent of its profits in a 12-month span, G3 Newswire reported. The economic recession, combined with a new anti-smoking law in France, kept would-be gamers from popularising the French casinos.
Since their shares were worthless, the entity received no cash in exchange for its shares of the JOA Group. Speaking of the so-called sale, Jean-Pierre Roy, the Director of Communications for Loto-Québec, told G3 Newswire that “It seemed that in the circumstances it was the best deal to give our share to new buyers. Nine years later, we must realise that this investment has not fulfilled its promises.”
While Loto-Québec did divest from JOA Group, it still retains shares in two French casinos, one of which opened this year and is purportedly profitable. The second casino is slated to open in 2015. Loto-Québec has approximately $7.9 million invested in these two casinos, money that it hopes not to lose.
This comes as disappointing news for Quebec gaming fans as the massive losses take funds away from the province’s gaming industry. Since they have been widely criticized over its French casino investments, as we reported earlier this year, perhaps this marks a turning point of smarter decision-making. Gamers should certainly hope so as Loto-Québec needs a lucky streak.