Future of casino in Halifax at issue amid declining revenues, possible move

·6 min read
A poker player plays with her chips at the Rio Hotel & Casino in Las Vegas. (Ethan Miller/Getty Images - image credit)
A poker player plays with her chips at the Rio Hotel & Casino in Las Vegas. (Ethan Miller/Getty Images - image credit)

Officials with the Nova Scotia Gaming Corporation acknowledge the future of Casino Nova Scotia in Halifax will have to be discussed once the pandemic is over.

The casino has struggled with declining revenues for a decade and COVID-19 kept it closed for most of a year.

Documents released to CBC show one of options on the table is a move away from the waterfront location where the casino has been located since 2000.

The documents also show revenues from the casino have been sinking to an "unsustainable" level for about 15 years.

"In our peak year, which would have been in the mid-2000s, we probably did about $75 million in revenue, and then over time it decreased by 30 per cent," said Bob MacKinnon, the CEO of Nova Scotia Gaming, the Crown corporation that oversees the gaming business in the province.

"So certainly that wouldn't have been sustainable."

He said having a viable casino is important. "It's a real gem in our city and it offers a safe, regulated environment. Lots of entertainment happens at the casino. It's a very social place."

However, MacKinnon said that the biggest challenge is to understand how people will want to socialize in the future. He said Nova Scotia Gaming would seek to understand this together with the casino's operator, the Great Canadian Gaming Corporation.

Bob MacKinnon is president and CEO of Nova Scotia Gaming, the Crown corporation that oversees the gambling business in Nova Scotia.
Bob MacKinnon is president and CEO of Nova Scotia Gaming, the Crown corporation that oversees the gambling business in Nova Scotia.

"Entertainment, music, food, as well as the gaming aspects are all integral parts of the casino. And so the biggest challenge is for us to understand [is], 'Are Nova Scotians wanting to get back into a social environment? And when?'"

Shrinking profits

When the casino opened in 2000 it employed 750 people but that number has shrunk to 300.

It reached peak revenues in 2006-2007, taking in $74.5 million in that year. Over the following years, that steadily dropped to $54.1 million in 2014-2015.

Any profits from the casino go to the province, said MacKinnon.

In the year preceding the pandemic, revenue from the casino was $65.6 million, and quarterly reports filed by the gaming corporation show all the Nova Scotia casinos saw a loss during the pandemic.

The casino shut down last March due to COVID-19. It reopened on Oct. 5, only to be shut down again by a Public Health order that took effect between Nov. 26-Jan. 8.

As of the end of February, casinos in Nova Scotia were permitted to be open.

A 2016 briefing note at Nova Scotia Gaming attributed some of the decline in revenues at the casino in Halifax to outside VLTs.
A 2016 briefing note at Nova Scotia Gaming attributed some of the decline in revenues at the casino in Halifax to outside VLTs.

"If we come in around $9 million in 2021, that's probably a reasonable estimate at this point in time," MacKinnon said.

Moving the location

In a 2016 briefing note to Nova Scotia Gaming's board of directors, staff attributed the drop in revenues to "changing player preferences," a ban on smoking and "rising competition from First Nations VLTs and the internet."

MacKinnon said the need for investment in the building, combined with decline in revenues, caused Nova Scotia Gaming to start considering its options in 2014. As well, the organization thought the proposed Cogswell Interchange redevelopment would have a negative effect on foot traffic to the casino.

"We thought, OK, if we're going to be looking at longer-term investments in the building, should we consider whether we should relocate? So that's when we undertook the assessment as to what other options might be there," said MacKinnon.

A server organizes the VLT area at a Royal Canadian Legion location in Winnipeg in 2018.
A server organizes the VLT area at a Royal Canadian Legion location in Winnipeg in 2018.

Staff came up with a proposal with five options for relocating the casino to other spots around the city.

In the documents released to CBC under freedom of information, the proposed locations are mostly blacked out, although two of them are in the Bayers Lake business park area.

One of those options suggested taking an existing building to make into a casino, "which would significantly reduce the capital required."

Staff considered, but ruled out, the old World Trade and Convention Centre and the former Halifax Library.

MacKinnon said some criteria for scoring potential new locations involved ease of access by car or other transportation, an available building and the cost of the space.

The plans are shelved for the duration of the pandemic. MacKinnon said it is possible that the best option is to stay at the existing location.

"It's really too early for us to say when we're going to open up the file again and give this another another look," he said.

There were 550 slot machines at the casino in Halifax when the relocation proposal was being assessed in 2016.
There were 550 slot machines at the casino in Halifax when the relocation proposal was being assessed in 2016.

"We just need to understand more about what the post-pandemic world is going to look like before we spend much effort and certainly before we spend any money on investment, whether it's an existing location or assessing others."

MacKinnon foresees Nova Scotia returning to its pre-pandemic ways at some point.

Documents originally withheld

CBC first began seeking information about the casino relocation project in April 2017, following a tip from the public. An application for information to Nova Scotia Gaming Corporation under freedom of information rules was denied.

The gaming organization declined to release any documents.

CBC appealed that decision to the Office of the Information and Privacy Commissioner of Nova Scotia, and in January 2021 an investigator was assigned. The delay was due to a backlog of cases.

The investigator from the privacy commissioner's office helped arrange an agreement between CBC and Nova Scotia Gaming to release the requested documents, which had significant redactions.

"At the time, we were doing an assessment and ultimately we would need to get government approval," MacKinnon said. "Anything that we would be putting forth for executive council approval would be subject to protections, exemptions."

MacKinnon said Nova Scotia Gaming tries to be open, transparent and accountable, and lists information on its website, which includes documents like financial statements and expenses for senior leadership.

"I will acknowledge that we took a broad approach on the exemption. And with the benefit of hindsight, we realized that we could have released some of the content," he said.

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However, MacKinnon said that the biggest challenge is to understand how people will want to socialize in the future. MacKinnon said NSGC would seek to understand this together with the casino operator, the Great Canadian Gaming Corporation."