Building Partnerships in the BC Gaming Model

Presenter:

Max Dressler – CEO

ST. Eugene Golf Resort & Casino

St. Eugene Golf Resort Casino

St. Eugene Golf Resort Casino 7777 Mission Road

Cranbrook, BC www.steugene.ca

History

The Vision

St. Eugene Golf Course

• Designed by Les Furber

• Opened in May 2000

• 7007 yards

• Par 72

18 Hole Championship

St. Eugene Golf Course

St. Eugene Resort

• 125 Guest Rooms

• Full fitness centre with hot tubs, pool, dry sauna, steam room

• Ktunaxa Interpretive Centre

• Delta Hotels opened January 2003

Casino of the Rockies

• 234 slot stations including E-roulette

• 9 table games

• Poker Room, OTB

• Lottery sales & Redemption centre

• Opened September 21, 2002

Our Awards

• Canada Select 4 ½ stars

• AAA/CAA 3 diamonds

• 4 Green Keys – Hotel Association Canada

• 3 Green Leaves – Audubon Society

The Owners

• Tripartite ownership group

Chippewas of Rama First Nation – Ontario

Samson Cree First Nation – Alberta

Ktnuaxa Nation Council – British Columbia

St. Eugene – The Operation

The Operation - Demographics

• Casino market

– 80% local player

– 61% female

– 27% age 60-69

• Hotel

– B.C. / Alberta business traveller

• Golf

– Primary Alberta followed by local market

• Dining – local followed by in-house

The Operation - Strengths

• Property Strengths

– Beauty in location

– High quality of property

– Casino of the Rockies

– Food & Beverage

– The Owners

– Our partnerships – BCLC

The Operation - Challenges

• Remoteness of property

• The Market

– Primary market < 60,000

• Competition

– Golf

– Resorts – Panorama, Fernie, Kimberley

• Our property

– Inability to host large events

Our Partner – the BCLC

• 1997: Province issued RFP for gaming /resort destinations

Key: entertainment options to domestic and tourism markets

Approval in principle granted for current site

September 2002: Casino of the Rockies opens

Critical to the property was the partnership with the BCLC

Our Partner – The BCLC

• British Columbia Lottery Corp

– Conducts & manages gaming in BC

– Enters into service/revenue sharing agreements with operators (Casino Operational Services Agreements)

– Owns the slot machines and some of the gaming equipment

– Issues policies and directives

Our Partner – The BCLC

• Revenue Sharing Model

• Service Providers Receive

– 25% of EGD revenue

– 40% of table games revenue

– 75% of poker revenue

• Four other key programs exist . . .

Our Partner – The BCLC

• Development Assistance Compensation (DAC)

• Host Local Government (HLG) Compensation

• Facility Development Compensation (FDC)

• Accelerated Facility Development Compensation (AFDC)

Our Partner – The BCLC

• DAC

– Struck in 1999, since amended

– Four signatories – Province, Proponent, Host and BCLC

– Goal: to encourage local economic development related the destination casino facility

– For approved projects contiguous to casino

– Province contributes up to 1/6 of Net Gaming Income to Proponent

Our Partner – The BCLC

• HLG

– First Nations rightly acknowledged as Host Local Government under agreement

– Signatory to DAC Agreement by reason of a destination casino being approved /constructed

– Province contributes up to 1/6 of Net Gaming Income to HLG

– Programming enhances economic benefits to HLG

– BCLC to key to successful execution / outcome

Our Partner – The BCLC

• FDC

– Open to all casino Service Providers

– Applies to BCLC approved projects for the development or improvement of casinos

– Can earn additional consideration equal to 3% of the Win

– May draw on FDC in amount equal to incurred /paid expenditures

– Extremely important to St. Eugene

Our Partner – The BCLC

• AFDC

– Created to enhance the economic model for redevelopment of casino properties by SP’s

– To facilitate timely redevelopment of casinos and entertainment amenities

– Similar conditions to FDC

– A one-time initiative only

– In addition to FDC at a rate of 2% of Win

Our Partner – The BCLC

• Our BCLC partnership is extremely valuable

– Floor refresh initiatives

– New Product

– Responsible Gaming

• Game Sense

– Free flow of communication / problem solving

– Assisting our property to flourish and grow

– Creating wealth and value for our owners

The Future

The Future

Concluding Remarks