SaskGaming posts financial loss for the first time in 25 years of operations due to COVID-19

·3 min read
A drone shot of Casino Regina on Saskatchewan Drive.  (Trent Peppler/CBC - image credit)
A drone shot of Casino Regina on Saskatchewan Drive. (Trent Peppler/CBC - image credit)

SaskGaming posted a loss of $13.4 million for the 2020-21 fiscal year, the first time the public casino operator has lost money in its 25-year history.

The details are contained in the Crown Corporation's annual report.

SaskGaming pointed to the COVID-19 pandemic as the source of the financial hit in a new release on Monday.

"This reporting year was unlike anything SaskGaming has experienced in 25 years of operation," SaskGaming president and CEO Susan Flett is quoted as saying in the news release.

Casino Regina and Casino Moose Jaw were forced to close for nearly seven months as a result of the pandemic and modest revenue made when they were permitted to open with restricted capacity was unable to offset the losses.

The closures also meant that approximately 570 permanent employees were temporarily laid off, SaskGaming said.

The Crown corporation's 2020-21 fiscal year did not get off to a roaring start.

The company's fiscal year began two weeks into a four month long closure of both of its casinos. Even when they were cleared to reopen in July 2020 with limited capacity — 318 at Casino Regina and 69 at Casino Moose Jaw — there were additional limits that made it harder for the Crown corporation to make money.

That included reduced food and beverage services, reduced hours and increased cleaning of high touch surfaces.

Despite the challenges, the company was able to to earn a profit during the second quarter of the year. But a spike in COVID-19 cases in November meant more restrictions before a second closure of the casinos was enforced in December. It remained that way for the rest of the fiscal year.

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As a result, revenue fell to just $30.9 million in 2020-21, compared to the $114.1 million raked in the year before.

Although expenses dropped as a result of temporary layoffs, it wasn't enough to make up the deficit caused by $44.3 million in expenses.

SaskGaming said it is hopeful that its properties will become fully operational and back to normal when the province's COVID-19 restrictions are relaxed.

However, due to the uncertain and "continually evolving" nature of the pandemic, SaskGaming declined to give a forecast for the current 2021-22 fiscal year.

The report also touts the success of SaskGaming's health and safety procedures, which saw it record only two potential cases of COVID-19 exposure.

Neither incident resulted in community spread, according to the report.

Possible ripple effect

SaskGaming's losses may have a ripple effect beyond the direct operations of the Crown corporation.

Normally the public casino operator pays 50 per cent of its net income into the province's general revenue fund. Then, 80 per cent of the rest is provided to its holding company, Crown Investments Corporation (CIC), in the form of a dividend.

Due to this year's losses, no payment was made into either fund and SaskGaming actually received $4 million from the CIC.

The general revenue fund is supposed to help fulfil the government's obligations to the First Nations Trust, which distributes funds to First Nations in the province to be spent on economic development, educational development, senior and youth programs. health initiatives and other charitable programs.

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The Community Initiatives Fund and Clarence Campeau Development Fund function similarly, except they target community vitality and Métis people, respectively.

The provincial government did provide support for organizations that would normally rely on those funds in the 2020-21 budget and 2021-22 budget with the combined total coming to $80 million.

A request for comment with the First Nations Trust was not returned on Monday.

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