Gateway Casinos Income Fund
TSX : GCI.UN

Gateway Casinos Income Fund

December 07, 2006 18:06 ET

Gateway Reaches Agreement With Delta Hotels to Manage Hotel at New Burnaby Facility

BURNABY, BRITISH COLUMBIA--(CCNMatthews - Dec. 7, 2006) - Gateway Casinos Income Fund (the "Fund" or "Gateway") (TSX:GCI.UN), one of the largest casino operators in Western Canada, today announced that it has reached a long-term agreement with Delta Hotels under which Delta will manage and operate the hotel, convention centre and restaurant at the Fund's new Burnaby facility. The facility is currently under construction and is scheduled to open in late spring 2008. The new hotel will be called the Delta Burnaby.

"We are pleased to partner with Delta, as it enables us to focus on our core strength of operating casinos," said David Gadhia, CEO of Gateway Casinos G.P. Inc. "Delta has a strong brand, effective central reservation system and well-established loyalty program, and is recognized as one of the highest-quality and most efficient hotel operators. With Delta as manager, we expect to generate higher average occupancy at the hotel, which may also translate into increased traffic at our casino."

The hotel will be positioned as a four-star hotel and convention centre primarily serving the substantial unmet business demand surrounding the Burnaby Casino. "We are located within the heart of a large business community, which includes companies such as Telus, Electronic Arts, IBM, eBay Canada and Kodak, and there is no sizeable business hotel and very little meeting space in the area," added Mr. Gadhia. "With its proven reputation in the business community in Canada and its Delta Privilege frequent guest program, Delta is the perfect operator for this market."

Delta will manage the hotel for a period of 10 years from opening, with a 10-year extension option. The Fund will operate the casino and all food and beverage operations within it, including a food court, multiple bars and an entertainment lounge.

The Fund's new Burnaby facility, located across the street from its current facility in the heart of the Greater Vancouver Regional District, will feature a 100,000 square foot casino, a full-service restaurant and a 200-room hotel, which also includes a 7,000 square foot ballroom and 14,000 square feet of meeting space.

About the Fund

The Fund is an unincorporated, open-ended limited purpose trust established under the laws of British Columbia, which operates the Burnaby Casino and Cascades Langley Casino and Hotel in Greater Vancouver, BC, the Palace Casino in Edmonton, Alberta and the Lake City Casinos in Kamloops, Kelowna, Penticton and Vernon, BC. Headquartered in Burnaby, BC, the Fund is one of the largest casino operators in Western Canada.

About Delta Hotels

With a diversified portfolio of 40 city centre and airport hotels and resorts, Delta Hotels is the leading first-class hotel management company in Canada. Widely regarded as Canada's brand of choice by guests and owners, Delta Hotels has also distinguished itself as an exemplary employer to its more than 7,100 employees. Delta Hotels is the only hotel company to be recognized by the prestigious National Quality Institute with two Canada Awards for Excellence, for quality (2000) and a healthy workplace (2004). It has also been voted one of "The 50 Best Employers in Canada" by The Globe and Mail's respected magazine, Report on Business (2001-2003, 2005 and 2006). Delta Hotels is wholly-owned by Fairmont Raffles Holdings International, which operates over 120 hotels worldwide under the Fairmont, Raffles, Swissotel and Delta brands.

Forward-Looking Statements

This press release contains forward-looking statements, which reflect management's expectations regarding the future growth, results of operations, performance and business prospects and opportunities of the Fund and its subsidiaries. Forward-looking statements typically contain words such as "anticipates", "believes", "continue", "could", "expects", "indicates", "plans" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including the effects, as well as changes in: national and local business and economic conditions; competition within the gaming business; consumer preferences, spending patterns and demographic trends; legislation and governmental regulation. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Fund cannot assure readers that actual results will be consistent with these forward-looking statements.

To find out more about Gateway Casinos Income Fund (TSX: GCI.UN), visit our website at http://www.gatewaycasinosincomefund.com.

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