Great Canadian Gaming Corporation
TSX : GCD

Great Canadian Gaming Corporation

October 24, 2006 18:13 ET

Great Canadian Gaming Brings Management of Hotel and Food and Beverage Operations In-House

Will Realize Operating Efficiencies Following End of Outsourced Management Agreement

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - Oct. 24, 2006) - As a result of ongoing initiatives aimed at improving operating margins, Great Canadian Gaming Corporation (TSX:GCD) (the "Company") announced today that it has entered into an agreement with Mayfield Consulting Canada Inc. ("Mayfield") to end the management agreements between the companies for Great Canadian's operations. The Company will now manage all its properties' hotel and food and beverage ("F&B") operations internally. The Company expects to realize improved hotel and F&B operating margins as a result of the exclusion of the management fee that is currently paid to Mayfield.

Under the terms of the agreement with Mayfield, Great Canadian will assume full responsibility for the management of the F&B functions at five of its properties (Fraser Downs, Hastings Racetrack, View Royal Casino, Nanaimo Casino, and the Casino on Broadway) in British Columbia as of October 31, 2006. Management of the hotel and F&B operations at Great Canadian's River Rock Casino Resort and Boulevard Casino in British Columbia will be transitioned to the Company on or before February 1, 2007.

Great Canadian Gaming has established a dynamic and proven hospitality team, headed by Tyrone Waite (Vice President, Hospitality Operations), to oversee the transition, planning, development and day-to-day business of these operations. Other senior members of this team include Mark Andrew (Senior Consultant), Rowland England (Director, Food and Beverage Operations) and Robert McPherson (Operations Controller).

Milton Woensdregt, Chief Financial Officer (pending regulatory approval) of Great Canadian Gaming, commented, "We are committed to improving company-wide operating margins derived from our gaming, hotel, F&B and theatre operations. Previous initiatives have included site level efficiencies, non-essential headcount reductions, and cutbacks in our marketing expenditures and corporate costs. The initiative to bring the management of our properties' hospitality operations in-house is consistent with our plan to elevate margins and allows us to better align these functions with the balance of our offerings. This new management structure is a significant component of our overall strategy as the Company wholly retains the operating income contributions from these areas."

"This move also allows us to leverage the tremendous depth of hospitality management talent Great Canadian gaming possesses. Tyrone Waite, Mark Andrew, Rowland England and Robert McPherson all possess extensive, relevant industry experience, and each has an extensive track record of success in the management of hospitality and/or food and beverage operations. They are ideally suited to lead our efforts to achieve the targeted efficiencies across these operations at each of our properties."

Pursuant to the termination of the management agreements, Mayfield will receive payments totaling $5.6 million, to be paid in two equal installments. Great Canadian will record a one-time charge reflecting the aggregate payment in the three month period ending December 31, 2006.

Current hotel and food and beverage management and staff employed by Mayfield at Great Canadian Gaming properties will be transferred to the Company according to each individual's preference. The terms of the management agreement for River Rock Casino Resort and Boulevard Casino will remain unchanged through the transition period, which will last at least through December 31, 2006 and up to January 31, 2007 if required. Salary expenses for hotel and F&B staff have historically been incurred by Great Canadian and reflected in the Company's operating results as part of the prior management agreement between the companies.

Tyrone Waite joined Great Canadian Gaming in 1998 and has more than 20 years of hospitality management experience including GM roles at Great Canadian's Nanaimo, Coquitlam and Nova Scotia operations. Mr. Waite began his management career at Expo 86 and later worked for Earl's Restaurants and the Commodore Corp.

Rowland England is a trained chef and a CMA. He has extensive international F&B experience, including concept and menu development, in such varied locales as England, Australia, Whistler, Toronto and Vancouver.

Robert McPherson joined the Company earlier this year, and possesses more than 30 years of hospitality industry management experience. His past employers include Canadian Pacific Hotels and Resorts (now known as Fairmont Hotels & Resorts) and Coast Hotels, where he served as Vice President of Finance for 7 years.

Beginning in July 2006, Mark Andrew joined the Company on a consultancy basis through the company he founded, Andrew Hospitality, Inc. Mr. Andrew has held senior level management positions in the hospitality industry including more than 25 years with Hyatt Hotels and Resorts. During that time, Mr. Andrew worked at properties across North America, and held the General Manager position at the Hyatt Seattle, Hyatt Charlotte and Hyatt Regency Vancouver hotels. Most recently, he served as GM of the Westin Bayshore Hotel and COO of Great Canadian Rail Tours.

ABOUT GREAT CANADIAN

Great Canadian is a multi-jurisdictional gaming and entertainment operator with facilities in British Columbia, Ontario, Nova Scotia and Washington State. Great Canadian operates fourteen casinos, five thoroughbred or standardbred racecourses, a community gaming centre, a hotel, two show theatres, and various food and beverage facilities. Further information is available on the Company's website, www.gcgaming.com.

DISCLAIMER

This news release contains forward-looking statements which reflect management's current expectations regarding the Company's objectives, plans, goals, strategies, future growth, results of operations, performance and business prospects and opportunities. These forward-looking statements are not guarantees, but only predictions. Although the Company believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. Such differences may be caused by factors which include, but are not limited to, ongoing requirements to comply with financial covenants associated with credit facilities, limited terms of operational service agreements with gaming regulators, pending and proposed legislative or regulatory developments, competition from established competitors and new entrants in the gaming business, dependence on key personnel, no assurance that systems, procedures and controls will be adequate to support expanding operations, potential undisclosed liabilities and capital expenditures associated with acquisitions, negative connotations linked to the gaming industry, First Nations claims with respect to public lands on which we conduct our operations, impact of legal proceedings, impact of smoking bans, interest and exchange rate fluctuations, non-realization of cost reductions and synergies, acceptance and demand for new products and services, fluctuations in operating results and general economic conditions. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including in the "Risks Factors" section of the Company's Annual Information Form for fiscal 2005, or as identified in the Company's disclosure record on www.sedar.com. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise.


Contact Information

  • Great Canadian Gaming Corporation - Investor Enquiries
    Mr. Thomas Bell
    Vice-President, Corporate Development & Investor Relations
    (604) 303-1000
    (604) 279-8605 (FAX)
    or
    Jaffoni & Collins Incorporated - Investor Enquiries
    Mr. Richard Land
    (212) 835-8500
    or
    Jaffoni & Collins Incorporated - Investor Enquiries
    Mr. David Jacoby
    (212) 835-8500
    Email: GCD@jcir.com
    or
    Great Canadian Gaming Corporation - Media Enquiries
    Mr. Howard Blank
    Vice-President, Media & Entertainment
    (604) 512-6066
    Website: www.gcgaming.com