Over the past decade, developers and investors noted that Vancouver casino revenues grew handsomely while most other casino areas had flat-lined. Then, in 2018, after years of accepting suitcases and hockey bags full of cash without questions, a new focus on Canada’s anti-money laundering laws have not surprisingly spoiled the party in British Columbia. See Vancouver’s once rollicking casinos hit by ‘dirty money’ crackdown:
The [Great Canadian Gaming] company reported last month that table drop — the amount of money patrons used at tables to buy chips — fell 16 percent in 2018 to C$298 million at its 10 properties in British Columbia, driven by a decline at River Rock. Revenue from British Columbia also dipped 3 percent due in part to the new source-of-funds procedures, it said.
Recent enforcement of laws requiring disclosure of the source of cash coming into casinos prompted Las Vegas-based developer and operator Paragon Gaming Holding Co. to abandon its interest in the newest Vancouver property Parq Resort, selling its interest to Ottawa-based private realty company PBC Group. Other investors include Canada’s Dundee Corp. Now that revenues are down, refinancing of debt has become a problem and S&P has warned of default probability within the year.
Dundee has said it’s seeking to bring in a new partner to Parq by Tuesday. All told, investors had pumped more than C$1 billion in long-term debt and equity into Parq by the end of 2018, according to filings. Dundee, which put in C$142 million of that, has said it doesn’t expect to fully recover its investment and that it could take another year or two before Parq is closer to stable operations.
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