Casino operation in British Columbia has been a topic of discussion for several years now as its nature remains engulfed in controversy. The uncertainty and declining levels of trust in the local gambling field have taken its toll on local venues such as Parq Vancouver. The newest casino location in the area is financially struggling, as it became evident by its loss rate and the outstanding debt which is already in the millions.
The flashy building of Parq Vancouver is one of the signature locations in Vancouver, as its futuristic design is real eye candy. As it turns out this minimalistic exterior is not enough to attract individuals and copious numbers of casino patrons. The location features two floors of casino space, as well as adjacent hotel venues and more family-friendly offerings such as dining areas welcoming families with children. It was recently reported that Dundee Corp. and Ottawa-based real-estate holdings firm PBC Group jointly operating the location are seeking support.
Government Crackdown Affects Operation
A third party would be needed for the outstanding debt that has to be paid in the upcoming months. With its help, the two entities would see a much-needed boost that could keep Parq Vancouver afloat. Andrew Hood, a research analyst at M Capital Partners Inc. pointed out that over the past fiscal year the location managed to lose about CA$153 million. A substantial part of this amount went for loans covering.
Among the reasons for this unfortunate situation is the government crackdown on casino venues in British Columbia. Money laundering allegations and the discoveries that appear to emerge every other day were the triggers that launched crackdown seeking to reveal more about the criminal operation facilitated by the casino field. In a recent US report, Canada was mentioned among other locations enabling laundering of dirty cash with their lax regulations.
Due to the crackdown, which has been in progress for the past two years, gaming revenue generated by the casino venue appears to be insufficient to guarantee a sustainable operation in the foreseeable future. It coincided with the official launch of the venue guaranteeing a bumpy start to Parq Vancouver’s operation.
Third Party Needed for Debt Payments
Silverius Miralles, a Toronto-based research analyst with S&P Global Ratings, pointed out that the reason for this is that casino buy-ins surpassing the CA$10,000 mark must be reported, according to the anti-money laundering regulations. This, in turn, made it hard for VIP players to gamble complicating matters even further. It could be recalled that the first months of this year saw actions aiming to alleviate the situation.
PBC now owns some 63 percent of the company, having purchased more shares from Paragon Gaming. Gaming revenue in the past fiscal year reached CA$170 million, maintaining operation on the positive side and the obligatory loan payment would be done in a timely manner. However, projections are that the parties involved in the process would have to pour more cash into Parq Vancouver.
The final weeks of 2018 saw speculations that the casino management could see major changes aiming to improve its performance. Estimations Dundee has made are that its CA$142 million invested would not be recovered anytime soon, but also that several more years would be needed for Parq Vancouver’s stabilization on the market.
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