- »Gateway Casinos to Receive $200M CEEFC Loan
Gateway Casinos to Receive $200M CEEFC Loan
Any good news is welcome these days, especially for a company like Gateway Casinos & Entertainment. All land-based casino companies struggled this year due to the coronavirus pandemic-mandated shutdowns in March.
Gateway celebrated the news that it received a $200 million CEEFC loan this month.
Approved for Liquidity
Late last week, Gateway Casinos & Entertainment announced that it was approved for $200 million in financial liquidity through the Canada Enterprise Emergency Funding Corporation (CEEFC).
This was the first loan granted under its Large Employer Emergency Financing Facility (LEEFF).
The company said the access to funds will help through the recovery process from the pandemic. With its two dozen properties closed throughout Canada for months this year – and some still not allowed to reopen – it was difficult to protect jobs and stay financially stable.
According to CEO Anthony Santo, Covid-19 hit more than just the company, it hit employees and communities. “The LEEFF financing will support restarting our operations and returning people to work when it is safe and viable to do so,” he said. “We are appreciative of the LEEFF program and, through a successful and sustainable restart of operations, we will bring jobs back and begin the work of repaying the LEEFF facility.”
CEEFC and LEEFF
LEEFF is a subset of CEEFC, separated to process emergency funding to large employers not covered by other government-sponsored programs. The pandemic response focused mainly on small businesses, leaving companies like Gateway to fend for themselves and their employees in an unprecedented crisis.
The Canadian government launched the programs to respond to some of the Covid-19 economic needs and facilitate a recovery. They work in conjunction with the Department of Finance and Innovation, Science and Economic Development Canada (ISED).
Gateway applied for the loan, qualifying because it faced “financial challenges” due to the pandemic. And it was the first company approved for the LEEFF loan, accomplished by proving that:
- Gateway has a significant impact on Canada’s economy with a large operation and workforce.
- It demonstrated at least $300 million in annual revenue.
- Gateway required a minimum loan of $60 million.
- It demonstrated its preservation of employment and maintenance of investment activities.
- Gateway committed to respecting collective bargaining agreements and protecting pensions.
- Gateway promised to publish annual climate-related disclosure reports to ensure its support of environmental sustainability and national climate goals going forward.
Prime Minister Justin Trudeau announced the new program in May as another way to support the Canadian economy. The Ministry of Finance is considering more than a dozen more applications for LEEFF at this point.
Casino Rama One of Many to Benefit
Gateway Casinos & Entertainment operates 26 properties spread across Ontario, British Columbia, and Alberta. Two more were in some stage of construction or renovation at the time of the coronavirus shutdowns. All together, they employ more than 8,000 people.
Casino Rama is one in Ontario that has not yet reopened, per the direction of public health officials. While some casinos in Ontario did reopen in July and August, Casino Rama was not one of them.
OrilliaMatters spoke to Unifor Local 1090 President Corey Dalton, who noted that employees at Casino Rama have not been out of work for more than six months, and they are struggling financially.
While the union and Gateway negotiated a settlement to extend health benefits for them until the end of September, LEEFF funding allowed the extension of those benefits through October 31. Union employees are also still in the paid inactive leave program, funded through the Canada Emergency Wage Subsidy (CEWS) federal program. That was scheduled to expire this week, too, but they recently extended the program into 2021.
Dalton says the employees are grateful that Gateway applied for the loan and received it. Even so, at least 70% of Casino Rama employees recently indicated that they want to return to work if Gateway implements the proper safety precautions.
Gateway is prepared, but the Ontario government is not ready to let it happen.
Even those casinos that have been given the approval to reopen, such as Great Canadian Gaming Corporation properties, must adhere to strict guidelines, such as two-hour limits for each customer. However, other casinos are restricted to a 50-person maximum, which CEO Santo says is “challenging.” He hopes that ongoing discussions with the Ontario government and health officials might deliver better news in the next few months.
Gateway Roller Coaster
Most people affiliated with Gateway applauded the LEEFF news and maintain hope that the situation will continue to improve for all of the facilities and their employees.
Not only did Gateway close more than two dozen properties to protect Canadians from the Covid-19 spread, the company took another hit this summer. After months and months of talks with Leisure Acquisition to merge, talks ended.
The deal with the US-based company had been scheduled to close in April 2020, but the pandemic changed everything. Leisure shareholders were not pleased with the actions of Gateway before the pandemic, especially the unwillingness to bend in negotiations.
With that deal having fallen apart, Gateway needed the LEEFF loan even more. Its path forward may be a bit more hopeful than in months past.